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Aberdeen City Council begin talks to bail out collapsed credit union

Councillor Jenny Laing at NESCU on Victoria Road.
Councillor Jenny Laing at NESCU on Victoria Road.

City council chiefs have begun high-level talks to bail out a collapsed Aberdeen credit union.

NESCU, based in the Torry area of the city with 2,500 customers, went into administration last month.

Now Aberdeen City Council is in talks with creditors to take over the business.

If the bid is successful it is planned for new branches of the credit union to be opened in the city – potentially providing an alternative to high street banks shutting services.

The news comes after banking giant Royal Bank of Scotland, still majority owned by the taxpayer following a bail out during the financial crisis, announced plans to close 62 branches across Scotland – including Dyce, Bridge of Don and Ellon.

The Press and Journal are fighting the proposals under the Save Our Branches campaign.

It is also understood that having the banking facilities could open up new lines of credit to the cash-strapped authority.

But town house insiders say the plan could cost millions.

Since the financial crisis, credit unions have worked with local authorities across the UK in an attempt to offer the poorest in society savings and loan options.

On February 27, a message was published on the NESCU website stating that the co-operative had gone into administration and had ceased trading.

More than 2,500 people who invested money into a north-east credit union have been assured they will have their savings returned after the organisation went bust.

Mrs Laing said: “Unfortunately, the poorest in our society have long been excluded from the savings and borrowing systems in this country because of the way they are set up by high street banks. This has left a vacum which has been filled by unscrupulous lenders like payday loan companies.

“I have instructed the director of resources to enter into discussions with NESCU’s administrators in an attempt to secure its long-term viability.”

She added: “We have all come to recognise that big business is not the panacea for our economic problems.”

And last night opposition SNP finance spokesman Alex Nicoll said the group was supportive of the moves.

He said: “Credit unions play a vital role in improving lives in our city.

“Of course I would back any moves to help support NESCU and other credit unions.

“If we want to celebrate their successes then it’s only right we stand by them when they need our help.

“Going further, I still believe the council should be looking set up a community bank and that this would help complement the important work of the city’s credit unions.”