Anglican Archbishop Justin Welby admits gaffe on “payday lenders,” renews attack

By Reuters Staff
July 29, 2013

(The new Archbishop of Canterbury Justin Welby arrives to give his first service at Canterbury Cathedral in southern England March 23, 2013. REUTERS/Luke MacGregor)

The head of the Church of England has said he was embarrassed to find out that his organisation had invested indirectly in a short-term loan company which he had vowed only days earlier to drive out of business.

The discovery of the relatively small investment was a major setback for Archbishop of Canterbury Justin Welby, after he launched a scathing attack on “payday” lenders who charge high interest rates on short-term loans that are typically repaid when borrowers receive their wages.

But the former oil executive and a member of Britain’s Banking Standards Commission said on Friday he would push ahead with his campaign to compete with, and eventually render obsolete, a business he labels “morally wrong”.

Welby’s attack on companies like Wonga, which this month lifted the annual interest rate on its loans to 5,853 percent, has gained widespread support among Britons who say the lenders are preying on poorer families already mired in debt.

“It shouldn’t happen, it’s very embarrassing, but these things do happen and we have to find out why, and make sure it doesn’t happen again,” Welby, leader of the world’s 80 million Anglicans, told BBC radio when asked about the investment.

His comments came after the Financial Times reported that the Church’s pension fund, worth five billion pounds ($7.7 billion), invested in a firm that led Wonga’s 2009 fundraising.

The Church has since said that the amount it invested indirectly in Wonga was 75,000 pounds.

Welby nonetheless defended his stance on an industry that has flourished during a time of austerity in Britain, when government spending cuts and falling real-term wages have squeezed families’ ability to make ends meet.

“I’ve seen it, I’ve lived in these areas and worked in them. I’ve had staff who’ve got caught up in it and had to be helped, and had their lives destroyed by it. This is something that really matters to me,” he said.

Read the full story by Adam Jourdan here.

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