davieG Posted 25 July 2013 Posted 25 July 2013 The Archbishop of Canterbury has warned the online lender Wonga that the Church of England plans to force it out of business - by competing against it. The Most Rev Justin Welby told Wonga boss Errol Damelin the Church planned to do this by expanding credit unions as an alternative to payday lenders. The plan is to create "credit unions that are... engaged in their communities", he said. Mr Damelin said he was "all for better consumer choice". 'Took it well' Payday firms offer short-term loans, often at high interest rates, and have been accused of leading people into more debt. Archbishop Welby, a former financier who sits on the Parliamentary Commission on Banking Standards, has previously lobbied for a cap on high interest rates charged by loan companies. Continue reading the main story Credit Unions - an alternative? There are about 400 credit unions in England, Scotland and Wales More than a million people use them - with a total of £807m saved and £627m given in loans as of the end of 2012 The government is planning to extend the interest rate that can be charged by credit unions from 2% a month to 3% a month (26.8% APR to 42.6% APR) It wants to double the membership of credit unions to challenge payday lenders Payday lenders offer small, temporary loans, but credit unions make a loss on loans of less than £1,000 owing to the administration costs involved, says think tank Civitas Q&A: How to borrow from a credit union He said the Church could do more to help non-profit lenders to compete with payday firms. "I've met the head of Wonga, and we had a very good conversation," the archbishop told Total Politics magazine. "I said to him quite bluntly that 'we're not in the business of trying to legislate you out of existence; we're trying to compete you out of existence'." He said of Mr Damelin's response: "He's a businessman; he took that well." Mr Damelin later said: "There is mutual respect, some differing opinions and a meeting of minds on many big issues. "On the competition point, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I'm all for better consumer choice." New unions Earlier this month, Archbishop Welby launched a new credit unionaimed at clergy and church staff. Credit unions charge their members low rates of interest to borrow money. BBC religious affairs correspondent Robert Pigott said the archbishop's plan was to go to some of the 500 independent loan companies and say to them, "We will help you by letting you have access to our buildings and expertise". Errol Damelin launched Wonga in 2007 and it has become a multi-national company Our correspondent said the Church would not run the companies but would help them and allow them to work on its premises. "I think the archbishop would see this as a social good countering a social evil," he said. He also said it was quite possible that in future people could go to church when they needed to borrow money. "Churches are already being used as libraries and shops and post offices. It's part of a wider trend for churches to try and become more relevant to people's everyday lives." Charities such as Christians Against Poverty already use church premises to offer debt counselling to those in difficulty. 'Irresponsible lending' The Association of British Credit Unions said it was a good idea to harness the skills among church congregations to help credit unions grow. "We believe it is speed and convenience which attracts people to payday lenders, not the short term nature of the loans. The amount of loans which are rolled over demonstrates how the short-term nature of the product is in itself not in the best interests of consumers - even before the high interest charges are added on," it said. Continue reading the main story Analysis Robert PigottReligious affairs correspondent, BBC News This is fully in line with the Church's efforts to capitalise on its 16,000 buildings - present in every corner of England - and to remain relevant to the lives of people whether or not they go to its services Churches already serve as shops, cafes, post offices and libraries, as well as meeting places. Christianity does not have the same problem with money lending and interest as Islam. The Bible makes repeated reference to the wrong done by those who abuse the power given to them by money. The story of Jesus overturning the tables of the money changers in the Temple, far from being an injunction against commerce in church, is part of that narrative. The sin of usury - the charging of excessive interest - is also dealt with in the Bible and Justin Welby himself has warned of the dangers of usurious lending, saying it was bad for society at large. This is the Church's way of integrating itself into the fabric of life, tackling what it sees as a social wrong, and living out its message at the same time. It is also a sign that Archbishop Welby will not hesitate to use his own background in finance to challenge those who control money in the UK. "Credit unions have been shown to be best value in the UK market up to about £2,000, and many will match bank rates for higher value loans as well. They lend responsibly and ensure repayment terms are affordable for the borrower." However, the association accepted that credit unions could do more to compete with payday lenders, by improving online applications and speedy decisions on loans. In April, the government announced an investment of £36m in credit unions, to help them offer an alternative to payday lenders. Wonga has said it charges about 1% a day on its consumer loans, which are short-term, and for small amounts. The lender said there was room for more competition in the market. "The Archbishop is an exceptional individual, with our discussions ranging from the future of banking and financial services to the emerging digital society," Mr Damelin said. "On his ideas for competing with us, Wonga welcomes competition from any quarter that gives the consumer greater choice in effectively managing their financial affairs." Tighter controls This view was echoed by the Consumer Finance Association (CFA), which represents many other payday lenders. "Everyone needs access to banking and credit facilities in the modern world and so we welcome any support for the credit unions, which we see as complementary to short-term lenders," said Russell Hamblin-Boone, chief executive of the CFA. "High standards and responsible lending are our watch words and I have written to the Archbishop seeking a meeting to talk about the role of alternative finance." An investigation into the payday loan industry by its regulator found widespread irresponsible lending earlier this year. The industry, worth £2bn, was later referred to the Competition Commission by the Office of Fair Trading. At an industry summit in Whitehall last month lenders were told they could face tighter controls, including limits on the number of loans that can be taken out and a cap on the total cost of credit. The measures will be considered by the Financial Conduct Authority, which formally takes over regulation of the industry from next April. Asked about Archbishop Welby's comments, Chancellor George Osborne said: "We are now regulating [the payday] sector. I am all in favour of credit unions and all sorts of other channels to allow families to get credit. I want to see as many options for families as possible." Wonga hit the headlines this month when Newcastle United footballer Papiss Cisse refused to wear the team's Wonga-branded strip. He pulled out of the club's pre-season trip to Portugal, saying he was not prepared to promote the payday loan company, citing his religion, and instead offered to wear an unbranded strip.
Zingari Posted 25 July 2013 Posted 25 July 2013 "And Jesus entered the temple of God and drove out all who sold and bought in the temple and turned the tables of the money lenders .He said to them, 'It is written, 'My house show be called a house of prayer'; but you make it a den of robbers.'"
Alf Bentley Posted 25 July 2013 Posted 25 July 2013 Sounds like an excellent idea, if it takes off - though if credit unions lose money on loans of less than £1000, the financial model could need some adaptation, as I imagine that a lot of payday loans are for less than that....though the people who are in the biggest debt trouble could easily benefit if they switched debts to the CofE/credit union set-up. What's going on? I thought this new Archbishop was supposed to be quite conservative. Instead, it looks like the CofE has been taken over by liberation theologists!
MooseBreath Posted 25 July 2013 Posted 25 July 2013 Christianity as a commercial services business. Interesting. "Who can you trust in a world of thieves, charlatans and deviants? Why, priests, of course. Visit your local church for a low cost loan today." Could be a real money spinner.
davieG Posted 25 July 2013 Author Posted 25 July 2013 You'd be buggered if you fall behind with the repayments.
Zingari Posted 25 July 2013 Posted 25 July 2013 You'd be buggered if you fall behind with the repayments. I think you can expect a visit from the baby eating bishop of Bath and Wells
I am Rod Hull Posted 25 July 2013 Posted 25 July 2013 I think you can expect a visit from the baby eating bishop of Bath and Wells The bank of the Black Monks of Saint Herod. "Banking with a smile and a stab"
The God Emperor Posted 25 July 2013 Posted 25 July 2013 wow so now you can owe jesus for dying for your sins and borrowing a tenner off him too!
Kitchandro Posted 25 July 2013 Posted 25 July 2013 I think you can expect a visit from the baby eating bishop of Bath and Wells BEEEEEND OVER BLACKADDER!
BoneDog Posted 25 July 2013 Posted 25 July 2013 Wonga chiefs will burn in hell for the state of their tv adverts alone. Disgraceful.
DANGEROUS TIGER Posted 25 July 2013 Posted 25 July 2013 I have to say, that I don't like to see the Wonga ads. They are legalised robbers, and not the good fairies they make themselves out to be.
Parafox Posted 25 July 2013 Posted 25 July 2013 Does this mean I can take money OFF the collection plate and replace it with an IoG (I owe God)
Guest MattP Posted 25 July 2013 Posted 25 July 2013 I'd fancy Wonga putting the COE business in a head to head.
Rincewind Posted 25 July 2013 Posted 25 July 2013 Was in Granby Street Tuesday and there were a film crew outside a money lending shop. Apparently an advert was being made. I'd say they were the Devils pawnshops if I was religious but I'm sure .there are more fitting descriptions.
Tielemans63 Posted 25 July 2013 Posted 25 July 2013 Wonga are an absolute disgrace - the way they prey on the vulnerable is nothing short of disgusting. First time I saw the advert I honestly thought it was some sort of weird joke. I rarely agree with anything the church does but good luck to 'em. I'd love it if they put Wonga out of business - vile cvnts (that's Wonga I'm referring to there!).
Monk Posted 25 July 2013 Posted 25 July 2013 Good luck to the church, but to compete Wonga out of business? ROFL
lavrentis Posted 25 July 2013 Posted 25 July 2013 Wonga are a disgrace. Like El Empty said for the adverts alone but they say they improve your credit rating? Probably not true as I would image the Mortgage Advisor wouldn't be too impressed if you happened to recently take out a Wonga loan.
Vacamion Posted 25 July 2013 Posted 25 July 2013 The C of E owns several billion pounds worth of land and property. Maybe they should sell some of that off and give it to the poor (their mission statement, after all) before getting on their high horses about lending businesses.
ADK Posted 25 July 2013 Posted 25 July 2013 Businesses like Wonga shouldn't be allowed to trade, i'm sure other countries would not allow such businesses to effectively rob the poor.
James. Posted 25 July 2013 Posted 25 July 2013 Wonga are a disgrace. Like El Empty said for the adverts alone but they say they improve your credit rating? Probably not true as I would image the Mortgage Advisor wouldn't be too impressed if you happened to recently take out a Wonga loan. If you took out loans with Wonga and paid them back on time every time your credit rating would probably improve. People say they are a disgrace and they "rob the poor"..? I had a look at their website today and it is absolutely fúcking clear as day exactly what you pay back, what the interest rate is and what the comparable APR is. Not sure what the issue is, but I'd argue that the energy and resources should be put into education so people understand what they are doing (not that it's particularly complicated) as opposed to having a go at what seems to be a well run, profitable company.
Tielemans63 Posted 25 July 2013 Posted 25 July 2013 If you took out loans with Wonga and paid them back on time every time your credit rating would probably improve. People say they are a disgrace and they "rob the poor"..? I had a look at their website today and it is absolutely fúcking clear as day exactly what you pay back, what the interest rate is and what the comparable APR is. Not sure what the issue is, but I'd argue that the energy and resources should be put into education so people understand what they are doing (not that it's particularly complicated) as opposed to having a go at what seems to be a well run, profitable company. I think you've hit the nail on the head. Everything they do is black and white but it's the people who don't understand the implications of those facts and figures (the vulnerable and poorly educated) who Wonga prey upon - being up front about how much they're going to **** people up doesn't make what they do any less abhorrent IMHO.
Vacamion Posted 25 July 2013 Posted 25 July 2013 I think you've hit the nail on the head. Everything they do is black and white but it's the people who don't understand the implications of those facts and figures (the vulnerable and poorly educated) who Wonga prey upon - being up front about how much they're going to **** people up doesn't make what they do any less abhorrent IMHO. Preying on uncomprehending poor people? Yeah, the Church is really on the moral high ground there.
Tielemans63 Posted 25 July 2013 Posted 25 July 2013 Preying on uncomprehending poor people? Yeah, the Church is really on the moral high ground there. Ha! Hadn't thought of it like that They'll be getting manipulated at a more competitive rate though!
Rincewind Posted 25 July 2013 Posted 25 July 2013 Obviously the church's tag line is, 'If you die as a result of taking the loan out at least you will be going to a better place where all are equal.' It is correct that there is not enough education about the loans. But these are hard times. Not everyone will be rational if a landlord is threatning eviction or they have to choose between eating and the rent. Yes they should seekl help and there is plenty of help out there but they have to have the information aqvailable and the mental capacity to seek it out. They may have gone through a break up, a victim of domestic violence, child abuse, or bereavement. All these can affect the state of mind and rational thinking. So they see an advert outside a shop, go in and are told there is no rush to pay back it all just pay what you can afford and if you want a top up we can arrange it right away.' Now what do you think that person will do? No FoxesTalk with sensible posters, a landlord harressing for rent and friends that have turned their backs. There are many in this situation.
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