Dot ComUnity Credit Union - ISA

Archi_Bald

Uh-oh, this sounds ominous. I haven't received my letter yet.

MARTYM8` wrote: »

This alliance with the regulators will allow us to focus on the development of our infrastructure and the foundation of the Credit Union

Alliance with the regulators??? Do they mean they are working with the regulators to find a way to stay in business?

Thankfully we have the FSCS guarantee, so don't need to worry about out money.

MARTYM8`

Archi_Bald wrote: »

Uh-oh, this sounds ominous. I haven't received my letter yet.

Alliance with the regulators??? Do they mean they are working with the regulators to find a way to stay in business?

Thankfully we have the FSCS guarantee, so don't need to worry about out money.

You might have received an email - that's how I got my letter. Other members may get theirs by post?

I agree - and at least their customer service is very efficient! Perhaps they have just expanded too far too fast.

I am not however banking on any bonus being distributed to credit union members however this year - as they can do if they generate a surplus!!

The covering email is very upbeat - compared to the letter.

"Happy New Year from all at DotComUnity!

We have had a very exciting 2014 and are now at the forefront of the industry with some really successful market leading products and services.

2015 is a year where we continue to grow and meet the requirements to excel into new diverse products and services and we look forward to working with all our members.

Over the next few weeks we are working on the implementation of further controls and processes to remain at the forefront of the industry, ensuring we meet all the expectations and regulation that you would expect from the banking and building societies in the UK.

We will continue to keep you up to date on our developments and wish you all well for 2015."

MARTYM8`

Just as a follow up DotCommunity have issued a new letter today to members. This confirms that for the time being no new deposits can be added to savings accounts including ISAs and also – slightly more concerning -members will not be allowed to withdraw funds.

This is apparently temporary – for the next two weeks – until they sort out their capital to asset ratio to meet the regulators requirements. Given my ISA is not due to mature until the spring that’s not an immediate concern – but it could be if you actually needed access to your general deposits with them!

“The Credit Union will not:
4. Accept new savings deposits from new or existing members
5. Issue new loans to new and existing members
6. Allow existing members to withdraw from their savings accounts

We expect to have the capital to asset ratio in place within the next two weeks and will notify all members once this has been completed.

The restrictions put in place with the regulators are to ensure that the Credit Union meets regulatory requirements and to grow and succeed for the benefit of all our members.”

gwapenut

It does make me wonder - say the withdrawal freeze continued beyond the 1-year date, could they force us all onto a 0.5% rate ISA (if their best available), refuse withdrawals, and thus have a cheap loan from us indefinitely?

So not bust, and therefore no chance of an FSCS refund, but no access to our money?

I'd hope there are regulatory instruments in place to stop this kind of scenario ... but it's now got me thinking.

Forti

This honestly alarms me and has pushed me from lurker to poster. They have clearly expanded too rapidly and not planned this properly. Their communications have been extremely amateur also.

I've been relatively comfortable having the FSCS guarantee to fallback on, but preventing us from making withdrawals is scary. And a vague promise of 'two weeks' provides me no comfort whatsoever.

MARTYM8`

The covering email is more upbeat - and they are promising members will receive a dividend for 2014 which will be confirmed at the end of the month? Not sure if that is linked to total savings balances (incl the ISA) or just the share balance in the basic everyday account?

"Dear Member

Further to our last email, we continue to drive forward and remain on schedule to implement the capital reserves by the end of the month.

We continue to develop our wide range of products and services with key milestones including:

- The launch of new bespoke savings schemes with a variety of partners through the DotComUnity Centres network
- The development of some exciting loan projects supporting individuals and communities throughout the UK
- An exciting new interactive website, helping to make it clear and understandable for all products and services available.

By the end of the month you will also be receiving your Annual Statements which will also show that the Credit Union has successfully paid a dividend on the year end 2014"

Steve3S13

I have two 5 yr Nisas with them and I am a little concerned too. I think to the point that if after two weeks they allow us to withdraw cash I will withdraw my £100K
I would rather loose the interest for the last 9 months since opening and have no worry about my cash than leaving it in for the next 4 yrs 3 months.
I looked at the registration of the FSA but could only find an old pdf showing a previous problem in 2011. Are we sure they are registered?
Secondly, what happens if we all try to withdraw our deposits as soon as the withdrawals are back up? Surely they don't have the cash to pay us all back at once. This would cause a "run" on the bank as in It's a Wonderful Life. What would happen if this did occur?
I have always found the CU to be efficient and helpful but now they have me worried.
Terrible thing to say but we may be better off if they fail, just hope they don't for their sake
Steve

Archi_Bald

Steve3S13 wrote: »

Secondly, what happens if we all try to withdraw our deposits as soon as the withdrawals are back up?

Yep, creating a run on them sounds a surefire way to bankrupt them.

darren72

Steve3S13 wrote: »

I looked at the registration of the FSA but could only find an old pdf showing a previous problem in 2011. Are we sure they are registered?

Surely you checked this before investing your £100,000 ??

Steve3S13

I did but then (May 14) going back on reading this thread now I wanted to double check that they were still registered and had not got to a situation that they were no longer registered.
Can they end registration?
I could find nothing now, that is what I'm referring to, the current situation not how it was back then
Steve