Church of England continue crusade against payday industry with launch of new finance scheme

The Church of England has unveiled a new initiative that is aimed at promulgating responsible lending which will see individuals being given access to financial help at their local churches.
The Church Credit Champions Network (CCCN) is the clergyís latest attempt to clamp down on the conduct of rogue unsecured lenders following the Archbishop of Canterburyís scathing attack on the payday industry last summer. 
Archbishop Justin Welby has identified that the scheme will seek to promote the utilisation of credit unions as an alternative form of short term finance in order to stop people using payday loan firms and eventually put lenders such as these ìout of businessî. 
 Adrian Newman, the Bishop of Stepney, has argued that the new measure will look to address the problems posed by the payday industry by raising competition levels in the short term finance sector and promoting ëattractive alternativesí to payday loan companies. 
 “You can either whinge about the Wongas of this world, or you can provide an attractive alternative.”
The new scheme marks the latest chapter in the Churchís ongoing crusade against the payday loan sector with official statements from prominent clergyman last year identifying their intention to have market leader Wonga closed down.
However, it was later revealed that the Church had invested in Wonga and had given money to the company- a reality that evidently still exists today with the Church yet to cut all ties with the firm.  
ëBeing a point of contactí
The new initiative will be piloted in three primary geographic areas in the UK; the dioceses of the capital, Liverpool and Southwark.
The primary target of the scheme is to educate members of the clergy about financial issues so that they can provide anyone who asks them for help with responsible and informative advice about the best measures to take in order to alleviate their money related problems. 
Churches will be utilised in order to assist members with loan applications, discuss accounts and provide people with advice about how to get out of debt, though no one will be transferred between different parties in the Church. 
They will use church buildings to help with new accounts, or advise customers on how to apply for a loan.
ìWe still see the effects of pay-day lending on deprived communities and the way they exploit people’s need for creditî, said David Barclay ,the CCCNís senior network co-ordinator. 
“It’s not about handling money; it’s about being a point of contact,” he added. 
ëWe need alternativesí 
The first stage in the scheme will be promoting the usage of local credit unions, which will be done by placing advertisements, posters and other promotional items inside Church of England sites. 
One such building in East London, St James in Clapton, has begun providing financial advice in the style the scheme necessitates and has already helped people attain access to the London Community Credit Union (LCCU), which provides unsecured loans, current account facilities and saving account products at lower rates than other short term lenders. 
ìWe still see the effects of payday lending on deprived communities and the way they exploit people’s need for credit,” said Mr Barclay.
“We need alternatives,” he said.
The new initiative has found support from the ex chief of the Financial Services Authority, Sir Hector Sants, who has identified his belief that the new initiative “will equip churches to be even more relevant to their local communities, and transform the lives of the many people we hope will be served as a result”.
Sir Hector, who now presides in the role of the Church of England credit union chairman, argued that the key aim that the scheme will seek to achieve is the promotion of community finance and called on big banks and major financial institutions to get involved as they have a ìkey role to payî. 
He also highlighted that many lenders have displayed conduct that is devoid of ethics by essentially basing their business revenue on people being unable to pay back their loans on time. 
Credit Unions
There are currently over 400 credit unions in the country at present with an estimated million people currently utilising them to access forms of finance. 
The Church has been keen to promote their usage ahead of payday firms because they are community owned organisations which do not function for profit; an important feature in the context of events because unlike payday loan companies they are not reliant on people missing payment dates or extending their loan payment.
Moreover, most offer far cheaper deals than payday companies and are more flexible with the payment dates, a feature that has severely marred the reputation of payday firms in the past year. 
However it is the difference in interest charges that make credit unions stand out, with London Mutual Credit Union charging just £12 worth of interest on a £400 loan for one monthís worth of borrowing whilst its payday counterpart Wonga charges a substantially higher £41.62. 
The Archbishop of Canterbury is currently pushing for the overall borrowing costs of loans to be capped at a fair limit so that payday loans do not continue to exploit the financially vulnerable with the Financial Conduct Authority expected to unveil proposals for a future cap sometime this summer. 
However, the payday loan sector has defended their conduct arguing that they provide an important facility to many people who otherwise would have been forced to go to even more dangerous sources, such as loan sharks, in order to alleviate their financial difficulties. 
“If the regulator continues to turn the screw and drive reputable lenders out of the market, these borrowers will be forced to look for credit elsewhere,” said Russell Hamblin-Boone, the chief executive of the Consumer Finance Association, which represents some of the lenders
It is hoped that the community finance element of the scheme will help to prevent people using loan sharks to acquire short term funding, 

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