General manager Steve Pinnuck and a delegation from the shire this week met with a representative from the NSW Treasury Corporation (TCorp) to express its displeasure at the  push for councils to reduce its exposure to local financial institutions.

It leaves the door open for big banks to benefit at a time when they are shutting branches in regional areas.

Mr Pinnuck will be asking his council to draft a motion to be submitted to the NSW Local Government conference in Albury in October.

Albury Council is also impacted by the changes which recently came to light.

“Our investment policy is very much localised,” Mr Pinnuck said.

“We invest with institutions that have got a presence in the shire full stop.

“But TCorp is saying to us because we’ve got 50 per cent of our deposits with unrated organisations it would be difficult for us to borrow through them.

“Unfortunately our worst fears have been confirmed.”

TCorp is fearful councils will be left exposed during the next major financial downturn.

Hume Bank chief executive officer Stephen Capello said he would be taking up the issue with the Customer Owned Banking Association.

“It is completely the wrong way to go with regards to supporting rural communities,” he said.

“From a banking perspective you’ve got our regulators getting us to reduce our exposure to the majors and you’ve got TCorp coming in on the side telling our councils to increase their exposure to the big banks.

“It is a real inconsistency across the regulatory bodies.

“We probably contribute to the local economy upwards of $20 million and TCorp having absolutely no visibility and context around how things work regionally … issue this blank instruction. It is not helpful at all.”

Member for Albury Greg Aplin’s office was again approached for comment.