Haven Credit Union is to close, it was announced today (Tuesday).

The directors said it was with 'much regret' that the decision was taken to close.

The directors have informed the Prudential Regulation Authority of their intention to engage Paul Brindley of Midlands Business Recovery to manage the process.

Haven Credit Union (HCU) with its office in Milford Haven has just over 1,000 members.

It started in Pembroke in 1993 and with just two paid staff has relied significantly on a large number of willing volunteers to provide a service to members who are largely based in Milford Haven, Neyland, Pembroke, Monkton and Pembroke Dock.

Credit unions are regulated by the Prudential Regulation Authority (PRA), a division of the Bank of England which oversees the way in which credit unions are run and lays down strict requirements for the level of reserves that a credit union needs to hold.

The directors of the Haven Credit Union recognised that in order to reach and maintain an adequate level of reserves the organisation needed to expand both its membership base and the level of loans, and that the preferred means of doing so was to work closely or merge with another credit union which would also bring about economies of scale.

Over the past year and with the support of Welsh Government and Pembrokeshire County Council the directors have been involved in detailed discussions with three other credit unions based in West Wales.

Unfortunately none of these have resulted in an agreement to merge and therefore the board have today reported to the PRA their decision to effect an orderly closure of Haven Credit Union with immediate effect.

Subject to PRA approval the board has instructed Paul Brindley of Midlands Business Recovery who has experience of working with credit unions in administration to wind up HCU and arrange repayment of all members’ funds. These funds are guaranteed by the Financial Services Compensation Scheme (FSCS) which means that members’ deposits will be repaid in full.

This process will take place with immediate effect and the offices of the HCU are now closed.

The board and Paul Brindley will be writing to each member within the next few days with details of what will now happen and the way in which members’ savings will be paid back to them – in full.

Once the PRA have approved the board’s decision Paul will commence the formal process of administration.

Ted Sangster, chairman of HCU said: “The board has taken this decision only after long and serious consideration of the alternatives. Having explored in detail the opportunity to merge with another credit union but failed to reach agreement we have concluded that we cannot demonstrate to the Regulator or in fact to ourselves and our members that there is any realistic likelihood of moving from our current performance of ticking over but failing to meet the required capital threshold to one of sustainable and acceptable performance in compliance with all regulatory requirements.

"We recognise that our members, staff and large number of volunteers will be disappointed and will also have significant concerns.

"These will be responded to in detail in the communications from ourselves and the administrator in the days ahead but it is worthwhile repeating here than members’ funds are secure as they are guaranteed in full by the FSCS.

"Paul Brindley as the administrator will manage the process of the FSCS paying back those savings and also the continuing administration of the loans which have been provided by HCU.

"In the meantime the board wishes to thank all those who have helped in the recent investigations as to the options open to us including Welsh Government, Pembrokeshire County Council and also the PRA who have allowed us sufficient time to thoroughly explore these options before coming to the decision we have now made.

"The board also 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.”