“We’re against payday loans so let’s invest in them!”

After a long drawn out campaign to tighten restrictions and legislation for payday lenders, Archbishop Welby changed his tactics recently. He has taken on the mission of competing with the payday lenders and hoping to undercut them with his credit unions. Credit unions offer the public loans at interest rates that are much more affordable than those of payday companies. Credit unions work as a kind of financial co-operative by the people that use them. Members are initially encouraged to deposit savings into the union and can then take out loans. The interest rates are  more affordable than those of payday companies, usually hovering around 2% – 3%.

Archbishop Welby has turned this battle into his personal crusade so imagine his chagrin when he discovered that the Church of England had invested approximately 75 thousand pounds in one of the leading payday companies.

Archbishop Welby had this to say. He was “embarrassed and irritated.”

How is this to be explained? On one hand the Archbishop has been threatening this exact same Payday company with his plans to compete it straight off of the market, and on the other his establishment seems to be backing the enemy itself.

The problem seems to lie with The Church Commissioners for England. This entity controls all of the Church of England’s investments. In a statement it was asserted that there had never been any investment in any payday firms directly but that it had fallen within their venture capital portfolio. The Commissioners went on to say that they still maintain that venture capital is the best way to serve the common interests of the Church.

The Archbishop explained on BBC radio 4, “It shouldn’t happen, it’s very embarrassing, but these things do happen and we have to find out why and make sure it doesn’t happen again.”

Archbishop Welby finds himself in an uncomfortable position as on the one side it is him that faces the public and makes statements on behalf of the Church and yet he has little to no control of the Church’s finances. He maintains that although he can put pressure on the Church’s Assets Committee, he actually has no jurisdiction whatsoever. New regulation is to be put in place to control indirect investments, and restrictions on ethical investment will also be addressed say the Commissioners.

Archbishop Welby is relieved that the whole issue has been resolved, and he can get back to pushing payday lenders off the market with the god old fashioned capitalist supply and demand model.

To this the payday firm in question answered:

“All for better consumer choice”.

It seems we have a fine example of theoretical economic theory. Will it pan out?