Church of England Battle Payday Lenders as FCA Issue Advertisement Warning
The Church Credit Champions Network (CCCN) has been launched by the Church of England, to encourage financial education, responsible lending and signpost alternatives to payday lenders. The network is piloting in the dioceses of Liverpool, London and Southwark.
The news comes after the FCA released statistics that show one in five adverts from consumer credit firms, including payday lenders, failed to meet the regulator’s expectations, resulting in their withdrawal or alteration. Clive Adamson, director of supervision at the FCA, has noted:
“It is particularly important in this sector that advertisements for financial products enable customers to make informed decisions.”
The Church of England has long criticized payday lenders, with the Archbishop of Canterbury stating he was trying to put such organisations “out of business”. Lenders have hit back at this, warning that driving mainstream, regulated lenders out of the market could lead to consumers resorting to using illegal loan sharks.
The CCCN have invited credit unions to set up in churches to discuss savings accounts or small loans, though no money will change hands. As a first step many Church of England premises have advertising material for credit unions on display.
What is a Credit Union?
A credit union is a small financial organisation set up by and for a community. These communities are often linked by geography, their work, or through a trade union – and a common bond such as this must be shared in order to join a credit union.
Members pool their savings to lend to one another and help to run the credit union, and any profits made go back to the members, either through the services offered or through rewards.
Primarily, they offer savings accounts and small loans, although they are becoming increasingly more professional, with some offering mortgages and ISAs.
They encourage members to save what they can and only borrow what they can afford, and aim to ensure their members are knowledgeable about money how to manage it.
If you are concerned about a payday loan you are struggling to repay, or are having trouble to make any savings because of your debts, don’t hesitate to get in touch with one of our advisers.