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Welby lauds OFT payday- loan action

15 March 2013


THE Archbishop of Canterbury has welcomed an announcement by the Office of Fair Trading (OFT) that it will take tough action against payday lenders.

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 November).

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 operating".

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 original loan."

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