Hi Peter.
That might, in fact be a useful move. If the CU writes off the debt, his savings will be set off against the loan, leaving approx €1,500 owing. In addition, the interest will cease accruing on the loan. This will enable him to pay the balance off faster. One downside is that they may be members of Irish Credit bureau and that will be reflected on his credit history but if he has other creditors anyway, that may be irrelevant. My advice would be to write again to the CU, insisting on the savings being set off against the loan with a proposal to clear the balance or he will stop paying and let them write it off.