Members of the Church of England will be able to join a church-endorsed credit union within five years.
The move is part of the Church’s so-called “war on Wonga” which started about a year ago when the Archbishop of Canterbury, Justin Welby, slammed payday lenders for pushing vulnerable borrowers into debt and said he wanted to “compete” Wonga out of business.
Now comes news that the Churches’ Mutual Credit Union (CMCU), will be launched on 1 October.
It will initially be aimed at members of the clergy, before being made available to all of the “active members” of the Church of England at 16,000 churches as well as the Methodist Church and Church of Scotland.
The battle to keep vulnerable people out of the clutches of predatory payday lenders needs all the help it can get. A tough crackdown by the City regulator, the Financial Conduct Authority, on some of the worst excesses of high-cost, short-term credit firms has helped almost halve the number of such companies flogging the expensive loans.
But it has also opened the door to all sorts of other potentially dodgy companies that are looking to make a quick profit by targeting hard-up folk with offers of easy finance.
The problem with such offers is that they can very quickly lead into a disastrous debt spiral. The temptation to take easy money when you’re struggling with debt can be a strong one. However, it is likely to be the worst decision you can take at a time of hardship.
The fact is there are always going to be people who need help with their finances. The more organisations there are that can reach out with a fair offer, the more people will be saved from a financial nightmare.
The church has been talking about its offering for more than a year now. Even when it does launch in October, it will only, at first, be offered to church staff. That’s a great move, but the sooner the offer becomes available to all, the better.
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