THE CLOSURE of the Haven Credit Union on Tuesday March 3, is a severe blow to those who depended upon its services whether as investors or borrowers. A statement by Chair of the Board of Trustees, Ted Sangster, disclosed that the credit union has been seeking a partner with which to merge for the last twelve months. Those efforts to preserve the union in some form have, however, come to nothing. Savings with the credit union are protected and it is anticipated that savers will have their money returned to them, in full, in around a fortnight’s time. Mr Sangster’s told The Herald: “As our statement reads, we have taken this decision only after long and serious consideration of the alternatives. The rules on Credit Union reserves have recently changed. That was not a determining factor in our decision, but it was something we took on board.” Mr Sangster continued: “We explored the possibility for merging with another credit union, but we were unable to reach an agreement. The board therefore took a principled decision. We could have carried on for another three to six months and then had the regulator step in.

That would have created uncertainty for our members and it the board decided not to let that happen. The board decided that it was better to arrange matters so that our members could be dealt with in a fair and orderly way. It was a painful decision, but it was the right one.”

After extending his thanks to the statutory bodies which have assisted the credit union, Mr Sangster paid tribute to the union’s volunteers and staff: “The board wishes to thank all those staff and volunteers who have worked on behalf of the credit union to provide this much valued service to the people of Pembrokeshire over the past 22 years. Many people have been helped and supported by their unstinting work for which again, our heartfelt thanks.”

Paul Brindley the appointed administrator said: “It’s a real disappointment that Haven Credit Union should be forced to close as there is a very real and necessary demand for their services. Members can be assured that their savings are safe. They will be paid back in full within the next two weeks.”

A spokesperson from Pembrokeshire County Council said: “We are disappointed to learn of the closure of the Haven Credit Union (HCU) but respect the board’s decision to discontinue the business. HCU was a professionally-run organisation offering a valuable service to the local community.”

They continued: “The council has been pleased to be associated with HCU over the years and has offered support wherever possible. This has included facilitating payroll deductions for council employees who were customers of HCU.”

The spokesperson added: “Over the past several months, the council has been supporting HCU to mediate a merger with other credit unions but unfortunately this has not proved possible.”

What is a credit union?

Credit unions are member-owned financial cooperatives operated for the purpose of promoting thrift, providing credit and other financial services to their members.

Credit unions in the UK now offer a wide range of services to their members; including current accounts, payroll deductions, standing orders and insurance. The UK Government has endeavoured to encourage the expansion of credit unions’ operations in order to stop people relying on high-interest door-step loans and loan sharks. A few credit unions now offer services more akin to a mainstream bank (such as the provision of ATM cards).

In 2013 the Archbishop of Canterbury, Justin Welby, launched a Church of England plan to support credit unions, to combat the rise of UK payday lenders charging extremely high interest rates.

Despite the moves to encourage people to use credit unions, the number of credit unions has tumbled over the last ten years. In 2004 there were 565 credit unions in the UK. Following the closure of the Haven Credit Union, there are around 370.

There remain two credit unions operating in Pembrokeshire, The West Wales Credit Union, in Fishguard and the Save Easy Credit Union in High Street, Haverfordwest.