KENSINGTON, U.K.–A credit union in one of Britain’s richest neighborhood has failed, the ninth to be liquidated in the U.K. so far in 2019.
K&C Credit Union, which operated as Your Credit Union and which was based in the Royal Borough of Kensington and Chelsea in London, was shuttered as the result of bad loans, according to regulators. The credit union had opened in 2012 and targeted the borough’s wealthy residents, appealing to them to deposit some of their cash in one of its savings accounts so it could be “invested and recycled within the community,” according to The Guardian.
The CU had 1,100 members.
The Financial Services Compensation Scheme (FSCS), the official safety net for consumers of financial firms that go out of business, said the credit union was declared in default. Administrators from CVR Global have been appointed.
The Guardian noted that “while the movement is enjoying a higher profile, UK credit unions appear to be collapsing at a rate of about one per month Many of those that have ceased (0perating) have tended to be small, with about a few hundred active members.”
One person quoted by the Guardian who was said to be “close” to the credit union told the publication, “Credit unions lend to people who maybe are not that creditworthy. They have quite thin margins when it comes to capitalization.”
While Kensington and Chelsea is home to large numbers of wealthy individuals, including celebrities and foreign tycoons, and frequently tops lists of the most expensive places to live in Britain, the borough also includes some of the most deprived areas in England, the Guardian reported.