There’s a quiet revolution starting to build momentum in the world of finance, and the Church is right at the heart of it. By forcing payday lending to the top of the political agenda and putting credit unions on the map, the Archbishop of Canterbury has not only changed the way that many people think about the role of the Church in modern society, he’s also changing the way Christians think about connecting their faith to their finances.
It all started with some innocuous comments to a little-known political magazine. Justin Welby was asked how his recent conversation with Wonga Founder, Errol Damelin, had gone. He responded by saying that he had told the payday lending mogul that the Church wasn’t interested in regulating him out of business, but in competing him out of business. The magazine printed it, the papers picked it up, and suddenly the ‘War on Wonga’ was begun.
It’s fair to say this caught even the Archbishop himself somewhat off guard, and the normally super-cautious Church of England suddenly had to contend with being in the spotlight for something other than homosexuality and women bishops – an experience made all the more awkward by the revelations that the Church Commissioners were very indirectly investing in Wonga.
Luckily, the Archbishop wasn’t for turning, and proceeded to appoint his friend and financial services expert, Sir Hector Sants, to form a special Task Group on responsible credit and savings. The Task Group in turn helped launch the Church Credit Champions Network, a project designed to help local churches engage with money and debt issues in their community. The Archbishop also lent his very formidable political weight to the calls for a cap on how much payday lenders could charge, a proposal which has recently become a reality.
So what’s been the impact of the Church’s efforts so far? Well, the cap on the cost of credit itself is a significant change. Before it, Joe Bloggs could have ended up in a crippling spiral of debt through taking out a payay loan at over 5000% APR. Now though, he’ll never have to pay back more than double of what he borrowed. Many of the least scrupulous payday lenders have already gone out of business as a result of this, and others such as Wonga have seen their astronomical profits dramatically curbed.
Alongside these regulatory changes, the Church has also put the spotlight on a previously hidden form of finance – credit unions. Credit unions are like neighbourhood banks, collecting savings from those who live in a particular community and using them to offer loans at a fraction of the cost of payday or doorstep lenders. In other countries they are a big part of the banking landscape, but in the UK they have long gone largely unnoticed (only 2% of the UK are members of a credit union, compared with 42% in the U.S). Now, thanks to the Church’s initiatives, credit unions are very much flavour of the month, and their services have formed part of some incredible local Church-based initiatives offering practical financial support to the rapidly growing number of Brits struggling to make ends meet.
While some of these practical efforts remain relatively modest in scale, the change in public perceptions of the Church’s role as a voice in public life has been huge. When the Archbishop first spoke out about Wonga and payday lending he was lambasted by the Independent and others in the press who told him to ‘stick to spiritual concerns’ and leave comment on financial services to the experts. But now as the Church’s efforts have started to bear fruit, the media tone has changed entirely, with the Spectator recently citing the work on payday lending as evidence that “at last we have an Archbishop of Canterbury who is a voice of reason, intelligence and authority”.
But despite all this, it is arguably within the Church that the ‘War on Wonga’ could have its biggest impact, by forcing Christians to look again at how their faith impacts their financial behaviour. We all know that Christians are supposed to be generous with their money, but until recently, whom you banked with was considered something entirely devoid of spiritual meaning. But as the Church’s embarrassing investments highlighted, we are all far more implicated than we’d like to think in the financial system which everyone can see is profoundly broken.
Many people (mis)quote Jesus’s admonition to “render unto Caesar what is Caesar’s” to try and claim that the Bible separates out finance and faith. But in reality, teachings about money and debt run right the way through all of Scripture. The Israelites were in slavery in Egypt because of debt, the Lord’s Prayer can be translated ‘forgive us our debts as we forgive our debtors’ and even the word ‘redemption’ comes from the world of finance.
If the Archbishop’s initiatives help Christians to re-engage with this rich tradition and apply it in their own contexts, then we may be on the cusp of a real revolution in the way our banking system works.