Short term loans and the church: Egg on your Holy Face

All the Archbishop Welby of the Church of England could say, as he wiped the yolk off of his collar, was that it is “embarrassing” and “irritating”.  This was regarding the latest scandal in his crusade against the land of payday. And so it should be for a man who has vowed to run the payday lender off the market with sheer expectation and economics.

How did it come to pass that after all the huff and puff of the Church of England, they managed to make their own house of bricks tumble down? The Church of England has several bodies that deal with its finances. There is The Church Commissioners for England that invest the Church’s money, there is the Church’s Assets Committee, and the Church’s Ethical Investment Advisory Group.

How, in the middle of the Archbishop’s mission to push the payday lenders into bankruptcy, did his mission become impossible and escape the attention of these three committees that the Church was actually investing in one of the major payday firms? Talk about sleeping with the enemy.

Well there was hasty scramble and the offending investment was withdrawn. The investment of approximately 75000 pounds was part of a venture capital portfolio, something that the Commissioners defend as the most “useful” investment tool to bring maximum cash and therefore goodness to the Church. This begs the question: What does the Church invest in?

The Church rebuts by asserting that “We have be realistic because this is after all the real world”. This is where the Church’s Ethical Investment Agency comes in to do their job, and this is what they ‘advise’. The Church should invest not more than:

  • 3% in companies that get their income from pornography
  • 10% in companies that produce military goods and services
  • 25% in companies that have anything to do with gambling, alcohol and high interest lenders, ie: payday lenders.

However, this is where it gets fuzzy. Let’s go back to the argument of the ‘real’ world, what happens if the Church invests in a hotel that has TV channels for pornography? Is it in this manner that the investment in the payday firm fell through the cracks?

Though the Archbishop claims it was an indirect investment, the Church’s Ethical Advisory Group did go on to admit that there were individuals in management who were aware of the situation and that “more could have been done”.

One has to admire the Archbishop though. He has calmly kept his dignity and his crusade intact. He still maintains that his credit unions and their reasonable interest rates, loan facilities and mortgages can out-do the largest and most lucrative payday, short term loan, quick loan guy in the business.

Could this crusade be a mission impossible? Or can he pull it off?