Archbishop of Canterbury vs Wonga
Fri Jul 26, 2013 9:42 AM
The Archbishop of Canterbury has said he wants to force the payday giant Wonga out of business by expanding credit unions – and the business secretary has backed his words
Archbishop Justin Welby told Total Politics magazine that he had had a “very good conversation” with Wonga’s CEO and informed him that the plan to expand credit unions was intended to “compete you out of existence.”
Welby added: “He’s a businessman. He took it very well.”
The Archbishop, who is a former treasurer of the oil group Enterprise Oil PLC and currently sits on the Parliamentary Commission on Banking Standards, helped launch a new credit union earlier this month aimed at church staff and clergy. He says he now wants to boost credit unions in all communities to rival payday lenders.
Credit unions charge lower interest rates than payday lenders and make a loss of loans under £1,000. Welby told Total Politics they are “both engaged in their communities and much more professional”.
Business secretary Vince Cable today weighed into the argument by telling Channel 5 news that the Archbishop was “right not just to condemn abuse but to offer alternatives which are more ethical”.
It comes on the back of calls for tighter regulation of the industry by the consumer group Which? while consumer minister Jo Swinson has said payday lenders need to “do more” to protect consumers. In September, the Financial Conduct Authority is starting a consultation on how it can implement tougher rules when it takes over regulating the industry in 2014.
Russell Gould, the head of Wonga for business, told Edge earlier this year that: “We’re trying to provide what consumers and businesses need, and I think we’re doing it right which is why we’re so popular.”