North Yorkshire Credit Union collapses

Related Stories

About 5,000 savers have been told their money is safe after the North Yorkshire Credit Union was declared insolvent.

The Financial Services Compensation Scheme (FSCS) protects savers when authorised financial services firms fail.

It said savers who have invested a total of £1.9m in the union would be repaid within seven days.

The credit union said it was no longer able to meet its expenses.

Established in 2009, the credit union stopped issuing loans and accepting new members in October.

At the time it said it was due to a reorganisation of its services.

Bad debts

Janet Looker, City of York Labour councillor and chairwoman of the board of directors of the union, said: "It's always difficult for any financial institution to balance its finances. The expenses were just too much.

"We tried to improve the situation but we would have needed significantly more time to come back out of it."

North Yorkshire County Council said it would meet on 6 November to consider a one-off grant to the South Yorkshire Credit Union to establish a new service in the county.

Councillors will be told the collapse of the existing union was due to high-levels of bad debts on loans made to members, high overheads and an over dependence on non-recurring grants.

Credit unions are not-for-profit co-operatives in which members' savings are used to provide cheap loans.

The FSCS said people with less than a £1,000 deposit will receive a letter to get their money over the counter at the Post Office.

Anyone with more than £1,000 in savings will receive a cheque.

Members who have loans from the union will be contacted about where to make future payments, the FSCS said.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

BBC York & North Yorkshire

Weather

York

Min. Night 15 °C

Features

  • Shinji Mikamo as a boy, and Hiroshima bomb cloudLove and the bomb

    The Japanese man who lost everything but found peace


  • Northern League supporters at the party's annual meeting in 2011Padania?

    Eight places in Europe that also want independence


  • scottie dogShow-stealers

    How Scottie dogs became a symbol of Scotland


  • Hamas rally in the West Bank village of Yatta, 2006Hamas hopes

    Why the Palestinian group won't back down yet


  • The outermost coffin of Tutankhamun 'Tut-mania'

    How discovery of Tutankhamun's tomb changed popular culture


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.