Church of England Continues to Dabble in Financial Support

Earlier this year, the Church of England hit headlines when the Archbishop of Canterbury spoke out against high-interest payday loans, particularly when given to the poor and vulnerable. Specifically, he vowed to “compete [them] out of existence.” A move into finance might seem unusual for a church, but he advocated that supporting credit unions was a way to help some of the most vulnerable people in difficult times, and therefore insisted that this was the direction the church should take.

 

After an initial flurry of media interest in these surprising and at times controversial comments, things seemed to go quiet. Now, however, it has become clear that this was not because the Church of England had changed its plans or lost interest. Recently, the Church of England website introduced a series of pages providing comprehensive information about credit unions, the services they offer, and why they are an alternative to short-term, high-interest loans that lead many people into debt.

Though the website of a religious body was not, a few months ago, where you would expect to go for financial advice, the information provided is extensive and covers a range of topics based around the issue. This shows that the church remains serious about playing a part in this industry and helping combat personal debt.

Are Credit Unions Really Useful?

Of course, this is now the pertinent question, and the one that decides whether the idea of a Church dabbling in finances is actually likely to succeed. The answer is that, though credit unions are not well-known for many people they could be an extremely useful tool. In particular, they can be useful for the purpose the Archbishop seems most concerned with – averting the need to build up high-interest debts.

A Credit Union will provide many of the same services as banks. They will be run by and for the benefit of the members, with proceeds shared and with the members’ interests put before profit. They also offer loans, which are designed to have reasonable interest rates and to be tailored to match the realistic repayment prospects of the recipient. This makes them a more manageable alternative to the notoriously high rates of payday lenders, and significantly less likely to cause unmanageable debts. With loans below £2000 – the levels that compete with payday lenders – they are considered the best-value option, though above this level they are usually neither better nor worse than standard banks.