THE Archbishop of Canterbury made good headlines in the summer,
when he stated that he wanted to use credit unions to compete with
Wonga and force it out of business (News, 26 July). He was
right when he championed the cause of credit unions, who do a great
job throughout the country to help people through tough times. But
the crucial question is this: do credit unions have the muscle to
take on the payday lenders?
In their present form, they do not. But local community banks
It is the state's responsibility to look after those who cannot
look after themselves. This includes trying to protect the most
vulnerable from financial exploitation. A gap, however, remains in
society now, which is being filled by Wonga and similar firms. What
can churches and communities do to empower the most vulnerable
people? I believe that local banks are the answer, and the Church
can do much to found and drive them forward.
THE Church has fought a determined battle to defend the poor
from excessive interest rates. Archbishop Welby's comments promote
a revitalised approach to the importance of the local economy
envisaged in Deuteronomy 23.20: "You may charge a foreigner
interest, but not a fellow Israelite, so that the Lord your God may
A local perspective on the economy requires a more compassionate
approach to lending, and vice versa.
We may not be able to abolish interest completely, as in
Leviticus 25.37 or Exodus 22.25, but we can harness the central
message of such passages by doing all we can to abolish predatory
It is right that there are many different relatively immediate
measures currently being taken to address the problem of high-cost
credit. We can restrict advertising, implement a greater degree of
financial education, do more work on shared data, address interest
rates, and improve debt advice. But this is not enough to address
the fundamental problem. People often need short-term lending.
Local banks have all the flexibility, the clout, and the
borrowing power of a bank, as well as all the sympathetic community
approach of a credit union. The Church has done a commendable job
in calling for banking reform: now it has the chance to lead
I held a conference in Gateshead in June, with 170 delegates who
were looking to set up organisations to address the lack of
community lending. They wanted to facilitate this through local,
trusted providers rather than by faceless organisations, based in
London, and run by computer models, not people.
A local bank, with a manager based in the area, would mean a
return to relationship-based banking - one that understands local
people. The Archbishop called earlier this year for a "local and
not London-based" financial system (News, 26 April),
saying that this concentration in the capital was one of the "great
dangers of the current mess". He is right.
THERE are few things that greater symbolise our sense of
compassionate community than the church congregation. The Church is
better placed than almost anyone to lead a local-banking
revolution. For millennia, it has preached a remarkable message of
thrift and charity. But the message of scripture is also one of
For far too long, the UK banking sector has been dominated by
the six largest banks, which have more than 75 per cent of the UK
current-account market. Two recently went bust. In Germany, 75 per
cent of bank lending is by the 400 savings banks,
Sparkassen, which have thrived in the recession because
they are locally based. We need to be offering people a genuine
choice away from the status quo, forcing banks to serve the people
rather than the other way round.
The type of long-term community banking which Archbishop Welby
mentioned has disappeared from our high streets and rural
communities. This has had a detrimental effect on the ability to
lend and to get credit. As a result, people turn to high-cost
Local banks would invest back into local businesses and
initiatives, restoring a sense of entrepreneurship to rural areas.
The rebirth of rural communities depends on our addressing this
I am keen to see a holy alliance of church, community groups,
and credit unions come together to address these problems. As I see
it, the choice for the Church is one of action now, or assistance
after the event: the latter has often been its traditional
THE Government has done its bit by radically changing onerous
regulation: we passed the Financial Services Act 2012, which
allowed local organisations for the first time to set up and
compete with traditional big-six banking. If the Church feels that
there is something exploitative in the current system, it is now
empowered to give body to that vision of a more compassionate,
Local authorities, churches, and individual businesspeople with
a philanthropic approach to their community are beginning to answer
the call, giving everyone a stake in their own community. This is
vital in restoring pride in an area.
To compete with predatory credit-providers, the most effective
way is for churches to set up local banks. These represent a more
comprehensive and accessible evolution from credit unions,
empowering the Church to protect the most vulnerable people - who
should be indebted only to the local community.
This is not just rhetoric: I am holding a second conference next
week in Whitehall, bringing together businesses and local
organisations with one clear purpose. We need local banks for our
communities. With God's good grace, we can make it happen.
Guy Opperman is the Conservative MP for Hexham, in
Northumberland, and private parliamentary secretary at the Home