Streetcred – another Northern “bank” collapses
Posted by markharrison on October 19, 2007
It was only a few weeks ago that we had the sight of a UK bank run – customer queuing up outside Northern Rock to get their savings back.
Alas, this week Streetcred has gone out of business.
Streetcred isn’t exactly a household name – it was a small local “credit union” (think not-for-profit building society), based in Rochdale, with about 3,000 customers.
It’s worth noting, however, that the vast majority of savings in such things are guaranteed by the Financial Services Compensation Scheme. All banks / building societies pay a small levy to this scheme, which then bails out customers if they go under.
The FSCS rules changed on the first of October, in the wake of the Northern Rock fiasco… and now the WHOLE of savings up to £35,000 is covered. (You can see the old rules on a previous blog post.)
I’m actually quite impressed that Rochdale Borough Council has set up a helpline for customers (nearly all of whom are local residents). More info on their website.
Of course, the downside is that these schemes take time to sort out – the FSCS needs to get all the records from Streetcred first, and it may not be until Christmas until this is fully sorted, but at least people won’t be losing their life savings.