The archbishop of Canterbury has informed Wonga that the Church of England wants to “compete” the payday lenders out of business after launching the new credit union earlier this month.
The Most Rev Justin Welby has said he had ‘a very good conversation’ with Errol Damelin, Chief Executive of Wonga, the Uks most well known payday lender, in which he outlined his plans to expand his credit union for clergy and church staff. These plans are part of a long-term campaign to increase competition in the banking sector.
Welby told Total Politics Magazine that he intends on creating “credit unions that are both engaged in their communities and are much more professional – and people have got to know about them.”
Damelin is said to have had a very respectful and professional response, saying “There is mutual respect, some differing opinions and a meeting of minds on many big issues. On the competition front, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I’m all for consumer choice.”
Last month, the payday lending industry, which we’ve seen rise rapidly in recent years, came under scrutiny by the Competition Commission following “deep-rooted” issues uncovered by the trading watchdog. The £2bn industry was referred for an investigation by The Office of Fair Trading as they were concerned that particular aspects of the market “prevent, restrict or distort competition”.
Damelin stated: “The Archbishop is clearly an exceptional individual and someone who understands the power of innovation”, while Welby has made it clear he is aware that this new development could just be the start of a “decade-long process”.