Archbishop of Canterbury ‘takes on Wonga’
The Archbishop of Canterbury tells controversial payday lenders Wonga that the Church of England wants to “compete” it out of existence.
The Most Rev Justin Welby has vowed to put Wonga out of business as it expands credit unions as an alternative to payday lenders.
Speaking about Errol Damelin, chief executive of Wonga, the archbishop said: “I said to him quite bluntly: ‘We’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence’.”
“He’s a businessman, he took that well,” he told Total Politics magazine.
Credit union for clergy
The archbishop’s remarks come after he launched a new credit union for clergy and church staff earlier this month at the General Synod in York.
Archbishop Welby, who has served on the parliamentary Banking Standards Commission, has said he plans to expand the reach of credit unions as part of a long-term campaign to boost competition in the banking sector.
There are also plans to encourage church members with relevant skills to volunteer at credit unions. Small, local lenders could also be invited to use church buildings and other community locations with the help of church members.
The government announced an investment of £38m in credit unions in April to help them offer an alternative option to payday lenders.
The entire payday lending industry, worth £2bn, was referred last month for a full-blown investigation by the Competition Commission after the trading watchdog uncovered “deep-rooted” problems with the industry.
The Office of Fair Trading (OFT) said it decided to make the referral because it continues to suspect that features of the market “prevent, restrict or distort competition”.
Wonga said in March that it welcomed any attempt to encourage responsible lending and that it has been “instrumental” in helping to raise industry standards.