It really makes you wonder who formulates policy for these organisations. Complete eejits.
Do not go into volunteer arrears, it will come back to bite you in unexpected ways.
The best advice I can give you is to apply for a new loan from a different provider on the payment terms you require and settle the existing credit union debt. Before you do so, formally ask your credit union for a settlement figure i.e. get it in writing, and then apply for a new loan for that amount. The settlement figure should not total more than the current capital balance outstanding plus up to 2 months interest.