THE Archbishop of Canterbury has welcomed an announcement by the
Office of Fair Trading (OFT) that it will take tough action against
The OFT announced on Tuesday of last week that the "leading 50
payday lenders" would be given "12 weeks to change their business
practices, or risk losing their licences". It said that it had
uncovered "widespread irresponsible lending and failure to comply
with the standards required".
Archbishop Welby said: "In the longer term, in order to ensure
that all members of society have access to affordable credit and
other financial services, the development of credit unions and
other forms of local finance is essential."
Speaking in the House of Lords last year, when he was Bishop of
Durham, Archbishop Welby had described the rates charged by
payday-loan companies as "clearly usurious" (News, 30
The director of the Church of England's Mission and Public
Affairs team, the Revd Dr Malcolm Brown, praised the OFT's
announcement on Tuesday. It "clearly shows that there are
deep-seated problems with the way the whole payday-loan market is
The Church's investment bodies do not invest in payday-loan
companies and other high-street lenders, a statement from Church
House said, "because of concerns about the exploitation of
vulnerable and low-income customers".
The Association of Christian Financial Advisers issued a
statement on Wednesday of last week calling for a maximum interest
rate, and a ban on roll-over credit "to protect the poor and
vulnerable from exploitation".
The OFT said: "Too many people are granted loans they cannot
afford to repay, and it would appear that payday lenders' revenues
are heavily reliant on those customers who fail to repay their