Credit Union in disarray after sacking of chief executive and resignation of directors

Martin Shipton

A credit union hailed as the largest organisation of its kind in Wales is in disarray following the dismissal of its chief executive and the resignation of three non-executive directors.

Just a year ago, Smart Money Cymru Credit Union had praise lavished on it after it merged with Newport Credit Union, creating new borrowing opportunities in communities where traditional banks were scaling down their services or withdrawing them entirely.

The merger was said to offer sophisticated financial services to over 15,000 members across a branch network extending through the Valleys and into mid Wales.

Major benefits

Smart Money Cymru CEO Mark White explained at the time that the strategic move would bring major benefits to members of Newport Credit Union. “The 3,500 members in Newport will now be part of a larger organisation with a network of branches offering a wider range of financial services,” he said.

“We are aiming to greatly expand the membership in Newport who will find the city centre branch continues to provide a high level of personal service, as well as an extended offer of more technically advanced products for savers and borrowers alike.”

With support totalling £600,000 from the Welsh Government, Smart Money Cymru had invested heavily in updating its financial technology, and the merger meant that Newport members would benefit from access to the credit union’s phone app, and enjoy other advantages such as fast turnaround, online loan applications, as well as being able to use the local branch network.

Branches

Smart Money Cymru had staffed branches in Caerphilly, Blackwood, Tredegar, Brecon, Llandrindod Wells and Aberdare. Mr White explained that while the merged entity would be under the umbrella of Smart Money Cymru, the culture, premises and full complement of staff at Newport would be retained in a move that promised to bring considerable benefits to members, staff and the local community.

Mr White said: “Newport Credit Union and Smart Money Cymru jointly employ 26 people as well as having the services of volunteers, and the new arrangements will mean job security for all as well as enhanced training and career prospects.

“As High Street banks shut their doors, the credit union movement is working to restore local banking – opening new, modern branches offering a full banking service in a welcoming environment. Unlike the traditional banking sector, credit unions offer a different approach since, being member-owned, they are constituted to benefit members rather than shareholders.

“We believe Smart Money Cymru has a key leadership role to play in supporting the Credit Union movement to respond to the financial needs of local communities in the fast-changing world of financial services.

Smart Money Cymru Chair Alun Taylor said: “This strategic merger will create a stronger, more resilient, efficient and technically robust and competitive Credit Union with an expanded retail footprint and a geographically diverse membership base and will provide an opportunity to ensure the power and principles of co-operative banking continue to benefit our combined communities for generations to come.”

Now, however, Mr White has been removed from his post and non-executive directors David Hopkins, Pratik Patel and Ben West have resigned.

Bad debts

The credit union’s most recent accounts, for the year ending September 30 2024, show a loss of £83,878 in comparison with a profit of £61,474 in the previous year. The major factor in the reversal was the increase in bad debts from £154,131 to £245,126.

A source close to the company told Nation.Cymru: “It’s hardly a surprise that bad debts have increased during a period when the cost of living crisis has placed enormous pressure on family finances.

“The credit union will lend money to some people who would find it difficult to borrow from traditional banks, and that always carries a higher risk.

“What Smart Money Cymru has been doing is entirely in line with Welsh Government policy.

“There’s a feeling that Mark White has been made a scapegoat, and it’s understood that he is planning to take Smart Money Cymru to an employment tribunal for unfair dismissal.

“The non-executive directors who have resigned were not happy with the situation.”

We asked Mr Taylor to explain what had happened, but he did not respond to our message.

Mr White did not wish to comment.