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Credit union goes bust

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Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Credit union goes bust Credit union goes bust

A credit union in Yorkshire has gone bust but its 5,000 savers will get their money back.

North Yorkshire Credit Union has been placed into liquidation following reports it was no longer able to meet its expenses. Its savers have some £2m tied up in the union.

It is understood North Yorkshire County Council - which gave the union a £200,000 loan when it first started - will hold an inquiry into the matter.

Janet Looker, chairwoman of the board of directors of the union, told the BBC: "There have obviously been some significant mistakes made along the road."

She added: "I suspect one of the mistakes was that we expanded too fast.

"We set up very modestly as the York credit union in 2006 and were managing very gently and growing steady but slowly.

"It may well be looking back, although we were keen to expand into North Yorkshire, it was a very, very large undertaking to do."

The Financial Services Compensation Scheme (FSCS) – which protects consumers when authorised financial services firms fail – is pledging to pay back the credit union’s members within seven days. On average, it says, it pays out in a few days.

It says people with less than a thousand pounds will receive a letter to get cash over the counter at the Post Office. Anyone with more than this will receive a cheque. 

Kate Bartlett, director of operations at the FSCS, said: “FSCS is protecting members of the North Yorkshire Credit Union. There is no cause for concern. We will get your savings back to you within one week. And you won’t need to lift a finger because the process is automatic.”

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