'My shock at collapse of credit union that was at heart of Dudley community'

Back in 2009, as one of the many savers given a fright by the collapse of the Bank of Ireland, I decided this very old-school sounding institution would be the perfect haven for some of my savings.

The Bank of England base rate had just been slashed to 0.5 per cent, and the big banks had been teetering on the brink of collapse. In the years before, overseas banks such as those in Iceland and Eire appeared to be the antidote to paltry interest rates on offer in the UK, but the collapse of Iceland's Landsbanki – leaving thousands of savers out of pocket ­­– were a salutary reminder that depositing your money abroad left you at the mercy of foreign governments.

And then my attention was drawn to Castle & Crystal, which at the time was offering a market-leading 5.25 per cent on its cash ISA. What's more, at a time when the public had had its fill with financial whizzkids, Castle & Crystal seemed, well, reassuringly old-fashioned. Formed by Dudley Council in 1993 for the benefit of its employees, the credit union expanded in 2003 to provide personal banking services to the general public.

And it all made perfect sense. At a time when the big banks were getting their fingers burned by irresponsible lending, and when people with patchy credit histories were being held to ransom by the extortionate profiteering of payday lenders, credit unions such as Castle & Crystal offered a return to traditional banking – where decisions were made by a human being rather than a computer algorithm.

By putting some of my savings in Castle & Crystal, I was not only earning five times the interest rate I would have received at the big banks, my money was also being put to good use in the local community.

There were some disadvantages. For a start, there was only one branch, which had much shorter opening hours than a conventional bank.

But given that I was in it for the long haul, and had no intention of withdrawing my money anytime soon, that was hardly a deal breaker. Profitable, ethical, and backed by the local council, what more could you ask for?

Better than that, they never gave me an ear-bending about banking apps.

Indeed, I was so impressed, I wrote a feature for this newspaper extolling the virtues of credit unions in general. I wrote how, with no slick advertising campaigns or bonuses for superannuated executives, the credit unions represented a return to the values which led to the start of the building-society movement in the Victorian era.

In truth, I should have moved my money years ago. The class-leading interest rates were long gone, and the inconvenient opening times had become a chore. But the staff were lovely, and I believed that by leaving my money in the credit union, I was doing something positive for the local economy.

On the whole, I still believe this to the case. But the collapse of Castle & Crystal is a salutary reminder that nothing in the financial world is ever guaranteed. It is yet to emerge what caused Castle & Crystal's collapse. But if a credit union established by one of the country's largest local authorities can find itself in trouble, just what is safe?

The Government's banking guarantee scheme, thankfully beefed up following the 2008 banking crisis, means that nobody should be left out of pocket – although how quickly we will be able to realise our funds remains to be seen. Not to mention the obvious inconvenience of having to find a new savings provider.

All of this comes just months after having to extricate myself from current-account provider, after 30 years, thanks to its branch-closure programme.

As Tommy Docherty once said, as one door shuts, another one slams in your face.