The Archbishop of Canterbury, The Most Rev Justin Welby, has said he wants to ‘compete’ payday loan companies ‘out of existence.’ And has said the Church of England could put its resources behind Britain’s 300 or so credit unions.
The Association of British Credit Unions Limited (ABCUL) has welcomed the move saying that by making their services as convenient and accessible as possible credit unions can help steer many more people away from high cost lenders.
In a statement ABCUL said: “We welcome the support of the Archbishop of Canterbury and the Church of England for credit unions; the wide community reach of the organisation and the skills within its congregations mean it is one of many groups that can help grow credit unions and we are in discussion with the Church of England about how this can be achieved.
“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. 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.
“Credit unions already provide financial services to around a million people in Britain, look after nearly £1 billion in assets and provide a range of services including current accounts, Cash ISAs and even mortgages. The Government is investing up to £38 million in the 2 year Credit Union Expansion Project to support credit unions and help develop the systems they need to make their services as easy to access as the payday lenders the Archbishop wants to see the end of.”