Thursday, 25 July 2013

WELBY TAKES ON WONGA!


THE Church of England is planning to take on controversial online lender Wonga in a bid to put it out of business.

Plans to create church-based credit unions to help those struggling with debt were unveiled by the Archbishop of Canterbury.

The Most Rev Justin Welby wants the credit unions, which don’t charge huge interest rates, to become a real alternative to payday lenders.

Payday firms offer short-term loans, often at high interest rates, some at thousands of percent, 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.

He said the Church could do more to help non-profit lenders to compete with payday firms.

Archbishop Welby told Total Politics magazine: "I've met the head of Wonga, and we had a very good conversation.

"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 Mr Damelin had “took the challenge 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."

Earlier this month, Archbishop Welby launched a new credit union aimed at clergy and church staff. Credit unions charge their members low rates of interest to borrow money.

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