- Friday, June 6, 2014
The Archbishop of Canterbury’s Task Force on Responsible Lending launched a pilot credit network program May 27 at St. Martin-in-the-Fields Church, London.
The pilot program, one of the first major initiatives by the Archbishop of Canterbury since his enthronement in March 2013, will initially be implemented in the dioceses of London, Liverpool, and Southwark.
“Financial distress is one of the principle causes of social detriment,” said Sir Hector Sants, former head of the Financial Services Authority regulatory agency for the City of London financial district and the chairman of the Archbishop’s Task Force on Responsible Lending. “Archbishop Justin has emphasized that helping alleviate financial distress should be central to the church’s mission.”
“The church will not handle money but instead provide a point of contact,” said David Barclay, senior network coordinator from the Church Credit Champions Network (CCCN).
CCCN, which will oversee implementation of the pilot project, aims to train members of local congregations so they are able to offer economically responsible financial advice and education, especially to economically vulnerable citizens who might be tempted by a loan from a payday lender.
These companies make short-term, high-interest loans to consumers. Until this year there was no cap on the amount of interest they charged. Many payday lenders rely on people not repaying loans on time, Sir Hector said in a speech during the launch at St. Martin’s.
“This is a grassroots initiative that will only succeed with the enthusiasm and engagement of the local church. Central to this engagement will be the flexibility to adapt to local circumstances and the willingness to learn from all as we go along,” Sants said.
In July 2013 Archbishop Justin Welby announced that the Church of England would attempt to put payday lenders out of business “by giving them greater competition.” Shortly after the announcement the Church of England confirmed that it invested funds in Wonga, one of the largest payday lenders in the U.K. The church has not finished divesting its financial interest in Wonga.
“You can either whinge about the Wongas of this world, or you can provide an attractive alternative,” the Rt. Rev. Adrian Newman, Bishop of Stepney, said in an interview with the BBC. Bishop Newman has a long track record advocating in support of credit unions. He will lead the pilot project in the Diocese of London.
Credit unions, which are community banks owned by their members, began in the United States in the early 1900s. The first similar institutions did not become popular in the U.K. until the 1960s.
“The Church of England is the best branch network in the country,” Sants said. “A major High Street bank has at most 3,000 branches, but the Church of England has 16,000. The purpose of the Champions Network is to harness that unparalleled presence in this community. The goal is to help those afflicted by financial problems and to equip us all to save and borrow in a responsible way.”
The task force is also exploring the possibility of a direct service provision, Sants said.
“Could the church community be encouraged to save and borrow within itself, using the opportunities provided by new technology, for example in peer to peer lending?” he asked. “It will take us a while to reach a conclusion and thus I am not offering an answer today.”
Image by doctor_bob9, via morgueFile