A woman who went without food so that she could claw back money to pay off a high interest loan has welcomed a move by MPs to grill leading figures from the payday loans industry. This report by Tom Savvides includes interviews with Steve Doran, MP Tracey Crouch and Niall Wass from Wonga.
- The Most Rev Justin Welby read law and history at Trinity College, Cambridge and began his career in the oil industry based in Paris and London, where he worked on West African - mainly Nigerian - and North Sea projects.
- He became a group treasurer in a company called Enterprise Oil, before resigning in 1987 after 11 years in the industry to train for the Anglican priesthood.
- He has also served on the parliamentary Banking Standards Commission.
Conservative politicians have been voicing their support of the Archbishop of Canterbury's plans to provide an alternative to payday lending, on Twitter.
I approve of @abcjustin's free-market approach to loan sharks. Don't preach at them; offer more attractive competition.
Justin Welby right that best way to deal with rip-off loans is to offer an attractive but responsible alternative, #creditunions
Archbishop Welby has a point going after the so called legitimate loansharks aka payday lenders such as Wonga. Their rates are rapacious!
– Errol Damelin, chief executive of Wonga
The Archbishop is clearly an exceptional individual and someone who understands the power of innovation.
We discussed the future of banking and financial services, as well as our emerging digital society. 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.
- Credit unions are small non-profit financial organisations set up by members with something in common to benefit their community.
- That common factor may be living in the same town, working in the same industry (for example, the Police Credit Union) or belonging to a particular trade union.
- Roughly 500 credit unions cover the UK offering loans, savings and current accounts to their members. A few even offer mortgages. Almost a million Brits are members.
The Archbishop of Canterbury has told Wonga the Church of England wants to "compete" it out of existence as part of its plans to expand credit unions as an alternative to payday lenders.
The Most Rev Justin Welby, who has served on the parliamentary Banking Standards Commission, plans to:
- Expand credit unions
- Encourage church members with relevant skills to volunteer at credit unions
- Invite local lenders to use church buildings and other community locations with the help of church members
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.
The Archbishop of Canterbury says the church is to "put its money where its mouth is" and go head-to-head with payday lenders.
The Most Rev Justin Welby told Total Politics magazine the church's plan is to create “credit unions that are both engaged in their communities and are much more professional – and people have got to know about them.”
He added that it would be a "decade-long process".
The Archbishop of Canterbury has told Wonga that the Church of England wants to "compete" it out of existence as part of its plans to expand credit unions as an alternative to payday lenders.
The Most Rev Justin Welby told Total Politics magazine he had delivered the message to Errol Damelin, chief executive of Wonga, one of Britain's best-known payday lenders, during a "very good conversation".
“I’ve met the head of Wonga and I’ve had a very good conversation and 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 flashes that smile again. “He’s a businessman; he took that well.”
She borrowed almost 200 pounds but is now facing a bill of more than two thousand - from a payday loan company. It means Steve Doran's plans to get married and buy a house are now impossible.
Today, the Goverment announced the biggest investigation into the industry - as demanded by many MPs. Pay day loan companies are notorious for massive interest charges.
Geoff Brown, of Hampshire Credit Union, says the Office of Fair Trading guidelines make it clear there is "an overarching principle of fairness in dealing with people".
He says, based on the OFT's report, payday lenders are not following this advice and "need to".