THE Church is in a
"unique position" to develop credit unions as an alternative to
payday lending companies, the Archbishop of Canterbury has
Speaking in the House of
Lords on 20 June, in a debate on alternatives to payday lenders,
Archbishop Welby said that "some five million people in this
country use payday loans. . . The situation is becoming too big to
"It is quite clear, when
I look at what is happening on the high street, and in our local
communities - particularly in the most deprived areas - that . . .
alternatives [to payday lenders] are very few and far between. My
own group, the Church, can play a part in the development of credit
unions up and down the country. . .
"For the credit-union
movement to be successful and sustainable, and other forms of local
finance to develop, we need a bottom-up movement of local
organisations' working to change the sources of supply. It will
take many years - ten to 15 years - but it must start now."
The Office of Fair
Trading (OFT) announced on Thursday of last week that it would
refer the payday lending industry in the UK to the Competition
Commission, because of concerns about "deep-rooted problems with
the way competition works". Earlier this year, the OFT gave the
leading 50 payday lenders "12 weeks to change their business
practices, or risk losing their licences" (
News, 15 March).
The Government convened a
"summit" on Monday, at the Department for Business, Innovation, and
Skills (BIS), to address concerns about the payday lending
industry. Speaking after the summit, the Economic Secretary to the
Treasury, Sajid Javid, said that the Financial Conduct Authority,
which will regulate the industry from 2014, would have "some real
teeth. They're going to feel the hand of the regulator on their
BIS has commissioned
research into the effect of advertising by payday lending companies
on consumer behaviour, which will be published in the autumn.
Payday lending companies
have come under pressure from activists in recent weeks. A group of
campaigners from the University of East London, and the community
organisers Citizens UK, has secured a meeting with an executive
from the Money Shop, a payday lending firm, and will request that
the company end practices such as rolling over loans and selling
multiple loans. The campaigners also requested that the company
advertised free debt-counselling services in its branches.
Bishop backs voucher scheme. The Bishop of
Ripon & Leeds, the Rt Revd John Packer, has endorsed a voucher
scheme, "Give Us Some Credit", which has been commissioned by St
George's Crypt, in Leeds, as a way to help people who are begging.
Vouchers can be bought from the Crypt, and given to people who are
begging. They can be redeemed at one of the Crypt's cafés.