A credit union which proved to be a lifeline to residents of South Tyneside and Sunderland have called in the administrators.
South Tyneside Credit union which trades under the name ‘First for Money’ is now in the hands of Dina Devalia and James Sleight of PKF Geoffrey Martin and Co.
The union which has branches in South Shields and Sunderland provides savings accounts and loans for people and small businesses in Tyne and Wear, County Durham and Northumberland.
It is thought around 4,000 members will be affected by the news announced today.
The Financial Services Compensation Scheme (FSCS) has declared the credit union in default, which means that savers are entitled to receive their deposits back.
Chairman of South Tyneside Credit Unit David Fleetwood said: “The board is very sad to have had to do this, but the business is no longer viable and we have been left no choice but to put it into administration.
“Our source of income is from loans to member and we also received grant funding from local authorities and the Department for Work and Pensions but due to the current climate that all stopped.
“We did not have enough income from the borrowing to keep the business going.
“It is a very sad day and it is one that’s hard to accept but we had no choice.
“The two councils South Tyneside and Sunderland have been superb with us over the years, it’s a pity we couldn’t have kept the business going.”
Dina Devalia, of PKF Geoffrey Martin & Co, said: “All of South Tyneside Credit Union’s savers will have their balances returned by the FSCS.
“Savers don’t need to do anything to get their money back - anyone with a deposit with the organisation should look out for a letter in the post from the FSCS in the next few days.
“Our immediate priority is to work with the FSCS to ensure that all savers get their money back as soon as possible. We’ll also be on hand to assist savers with any queries that they may have on issues such as setting up new savings accounts or transferring direct debits.”