Credit union collapses

East London Credit Unions headquarters in Walthamstow High Street
East London Credit Unions headquarters in Walthamstow High Street

Savers are being refunded, reports James Cracknell

More than 5,000 members of a local credit union have had their savings returned to them after it went bust.

East London Credit Union (ELCU), based in Walthamstow High Street, went into administration last month after a proposed merger with another credit union collapsed. The Financial Services Compensation Scheme (FSCS) stepped in to protect its 5,500 members and within days was able to provide up to £85,000 in compensation per person – about £2million in total.

Waltham Forest Council also issued a statement to say that despite previously funding the credit union it was unable to help finance ELCU’s failed merger with London Community Credit Union (LCCU).

Walthamstow resident Kate Bohdanowicz joined the credit union six years ago and said she was saddened at its closure. She told the Echo: “I was disappointed to hear it had collapsed and angry when I read that it was due to both central government and the council withdrawing funds.

“Within a few days of the closure, I received a letter explaining that I would be refunded and I’ve since had my money returned. However, I feel sorry for the many people who had their wages and benefits paid into it as for a few days we couldn’t access our money and that might have been disastrous for some.

“The credit union was a lifeline to many in the community and provided financial services in a more ethical way than the high street banks. I’m hoping to join another one as soon as possible.”

In a statement, a council spokesperson said: “We are saddened that ELCU’s proposed merger with LCCU will not be able to proceed and that ELCU has therefore ceased operations.

“The council is working with other providers to ensure a provision is in place for the residents of Waltham Forest. We know how important this is. We are currently in discussions with LCCU about how we may be able to support them in establishing a branch in the borough.

“As a council we support credit unions; they operate on a not-for-profit basis and deliver flexible, easy to understand financial services and provide an invaluable service to the community. The council has previously given financial support to ELCU over several years. Sadly, the cost of funding this merger would have been too high to make it viable.”

For free financial advice contact Waltham Forest Citizens Advice Bureau:
Call 020 8521 5125