CLIENTS of a Warrington-based credit union that went bankrupt have been reassured that their funds are safe.
Members have been informed that the North East Warrington Credit Union (NEWCU) has entered into voluntary liquidation after more than 25 years.
Following the decision to close the business, which has an office on Cinnamon Lane in Fearnhead, administrators Leonard Curtis were appointed to begin liquidation proceedings.
They have taken steps to allay the fears of those who have trusted the union with their money that it is safe and that they have nothing to do.
In a statement, Leonard Curtis said: “NEWCU is a community cooperative and non-profit organization.
“It was owned and run by its members for its members. Membership was based on people sharing the ‘common bond’ of living and/or working in the Warrington area.
“NEWCU provided its members with the ability to save or borrow money and provided services to those with low incomes and those with no borrowing history.
“NEWCU entered administration as it was unable to meet its regulatory requirements due to a number of historical bad debts and was subsequently declared insolvent.”
The statement goes on to say: “The Financial Services Compensation Scheme (FSCS) subsequently declared the company in default on May 4, 2022, meaning it can step in and return money to members.
“The directors have liaised with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) regarding plans to close the business, and they will continue to work with the PRA, FCA and FSCS to obtain a satisfying result.
“Administrators are keen to assure clients that their funds are safe.
“In most cases, customers’ savings will be refunded to them within seven days of the date the business was declared in default by the FSCS, which is May 4, 2022. Customers don’t have to do anything.
“The FSCS will automatically refund customers their savings using the account information it receives from the company. FSCS will contact customers by mail.
The FCA also said the FSCS is stepping in to protect members and will return their money within seven days from May 4, when the credit union was declared in default.
But he warns that all customers should remain alert to the possibility of fraud.
If you are cold called by someone claiming to be from the credit union, administrator, FSCS or FCA, please end the call and contact that organization directly.
There was a second credit union in Warrington called Warrington Credit Union which merged with Unify Credit Union last October.
There is no relationship with NEWCU, and its members are unaffected by the announcement.
Angela Fishwick, managing director of neighboring credit union Unify, said: “We are very sad to hear of the closure of NEWCU, which has served its community since 1994.
“The loss of the credit union to the local community is heartbreaking for the residents who have come to rely on the services provided by the dedicated volunteers, who have worked tirelessly to keep the credit union open.
“On behalf of the Unify Board, I want to reassure members that the closure of NEWCU is in no way related to Unify Credit Union.”
NEWCU members can still access credit union services through Unify Credit Union, and anyone interested in finding out more should call 01942 245656 or visit unifycu.org
“Having recently extended our common bond to Warrington, we are determined to strengthen our presence in the city,” added Angela.
“We hope to work in partnership with Warrington Borough Council to bring a full-time presence to Warrington to ensure residents can still access ethical financial services.”