SWANSEA, U.K.–A credit union has abruptly closed here and left the national deposit insurance fund to pick up costs related to making members whole.
The 3,128-member My Community Bank Wales, also known as Loans and Savings Abertawe Credit Union Limited (LASA), suddenly shut down with a notice in the window saying the branch had become an “unnecessary expense” and a “drain on members' reserves.”
The U.K.’s Financial Services Compensation Scheme (FSCS) announced it will protect members and return money to the vast majority of members within a seven day target. The FSCS said it expects to make payments totaling nearly £500,000 to nearly all members.
Members with up to £1,000 in their account will receive a letter from FSCS to get cash over the counter at their local post office. Members with more than £1,000 will receive a check from the FSCS for their balance.
The FSCS insures individual accounts to £85,000, and joint accounts to £170,000.
A Welsh Government spokeswoman issued a statement saying, "We remain committed to the future of credit unions, and to ensuring that everyone in Wales is able to access a credit union, as they have an important role to play in our communities…This is an isolated case which does not reflect the position of other credit unions in Wales."