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Welby wages war on Wonga in Church's classrooms: Archbishop wants lessons on evils of payday loans taught in schools
Archbishop of Canterbury wants to spearhead educational campaign against high-cost borrowing in Church of England Schools
Sir Hector Sants is looking into the strategy
Justin Welby has vowed to 'compete' payday lenders out of business
By NEIL CRAVEN, FINANCIAL MAIL ON SUNDAY
http://www.dailymail.co.uk/
April 5, 2014
The Archbishop of Canterbury wants to take his ‘war on Wonga’ into the classroom using Britain’s network of Church of England primary schools to spearhead an educational campaign against high-cost borrowing.
The strategy to teach children the dangers of sinking into expensive debt through so-called payday lenders such as Wonga is being examined by former Financial Services Authority chief and Barclays executive Sir Hector Sants, who now heads the Archbishop’s Task Group on Responsible Savings and Credit.
Archbishop Justin Welby has slammed payday lending as ‘usury’ and last year said the Church would try to ‘compete them out of business’ with its own credit operation.
Justin Welby has branded payday lenders as latter-day usurers
The schoolroom strategy emerged as Sants and the rest of the Archbishop’s appointed task force met for the second time on Tuesday – the same day that the Financial Conduct Authority took full responsibility for the payday lending market from the Office of Fair Trading.
Sants said: ‘There is the question of whether more could be done to educate young people, equip them to understand how to go about accessing credit in a responsible way and develop their savings culture.
‘There is a huge amount of work that has already been done in this area – by charitable institutions, by credit unions and a number of Government initiatives. But I think there is room for more to be done, particularly in primary schools.’
The Church of England has no power to rewrite the curriculum and Sants said that it would ‘take time to work out’ how to develop the agenda in collaboration with school authorities.
But he said that primary schools and church schools in particular were ‘obviously an area where the Church can make a huge contribution.’
About one million children attend Church of England schools. A quarter of all primary and middle schools – 4,443 in total – are Church of England while 6 per cent of all secondary schools – some 221 – are CofE.
The comments are the first indication of how far-reaching the Church’s mission is likely to be in its efforts to curtail the rapid growth of the payday loan market.
Sants was drafted in to run the Church’s Task Group last year after the Archbishop threw down the gauntlet to payday lenders. He has vowed to set up a church-run credit union to offer struggling Britons an alternative to legal loan sharks and put the firms out of business.
He has specifically cited Britain’s largest payday lender Wonga as one of the firms he wants to target.
Sants said credit unions provided an ‘excellent model’ of how responsible lending could be introduced to local communities.
But he added: ‘So far the publicity has been around credit unions. We are in fact trying to take a wider and more all-encompassing approach. We’d prefer to think about this as how the church can encourage and facilitate the responsible use of credit and savings.
Sants said that he is also examining what type of lending the church would be most ‘comfortable’ with offering parishioners and others that needed access to credit.
He also said that he wanted to introduce practical ways to help people to avoid getting hamstrung by debt ‘on the ground and in communities’.
Revelation of the early stages of the plan come after a seismic week for the sector, during which it emerged that Wonga founder and chairman Errol Damelin is to step down. He is said to have grown weary of constantly defending Wonga from a stream of criticism.
It also emerged that US-based Dollar Financial, the second biggest payday lender operating in Britain, had agreed a sale of its business to private equity firm Lone Star.
Over the past 12 months Dollar Financial, which owns the Money Shop and online lenders Pay Day UK and Pay Day Express, has been rocked as the Office of Fair Trading has clamped down on the behaviour of firms operating in the market.
Their worsening financial performance has been compounded by a series of legal threats on behalf of US shareholders.
The Financial Conduct Authority plans to tighten controls on the market even further this month following its own review. FCA boss Martin Wheatley, who has replaced Sants as Britain’s financial watchdog, last week said up to a quarter of payday lenders could be forced to pull out of the market under new rules.
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