Tendring Credit Union is being voluntarily wound up. The committee which runs the union asked for advice from the Financial Services Authority (FSA) after suffering cash flow problems
It is now going through the process of a voluntary winding-up procedure.
George Ames, president of Tendring Credit Union, said the committee was waiting for further instructions from the FSA on what steps to take next.
However, he said he was confident the majority of the 350 members would get all their money back through the Compensation Fund.
"At this stage, we can only take money off people to pay off their loans but not give out any new loans or share withdrawals," he said.
Robert Fenn, of Skelmersdale Road, Clacton, told how he was unable to get at his £835.
"I was informed I cannot withdraw any money and a hold has been put on the account," he added.
He has taken the matter up with Tendring councillor Roy Smith, who has promised to investigate.
A spokesman for the FSA in London confirmed Tendring Credit Union officers had made an application to be voluntarily wound up.
Tendring Credit Union was set up in 1996 in Station Road. It is a people's bank equally owned and managed by its members and was particularly aimed at those with disabilities or on low incomes.
Published Friday November 15, 2002
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