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Financial advice to be available in church Financial advice to be available in church
(34 minutes later)
The Church of England has launched a new scheme to promote responsible lending, which will see people being given financial advice in church.The Church of England has launched a new scheme to promote responsible lending, which will see people being given financial advice in church.
The Church Credit Champions Network (CCCN) will encourage consumers to use credit unions rather than payday lenders.The Church Credit Champions Network (CCCN) will encourage consumers to use credit unions rather than payday lenders.
It follows the Archbishop of Canterbury's criticism of payday lenders in July last year.It follows the Archbishop of Canterbury's criticism of payday lenders in July last year.
Justin Welby said he was trying to compete such lenders "out of business".Justin Welby said he was trying to compete such lenders "out of business".
The CCCN scheme is launching in three pilot areas: the dioceses of London, Southwark and Liverpool.The CCCN scheme is launching in three pilot areas: the dioceses of London, Southwark and Liverpool.
The idea is to train up church members to offer responsible advice on financial matters.The idea is to train up church members to offer responsible advice on financial matters.
They will use church buildings to help with new accounts, or advise customers on how to apply for a loan.They will use church buildings to help with new accounts, or advise customers on how to apply for a loan.
However, no money will change hands in church.However, no money will change hands in church.
"It's not about handling money; it's about being a point of contact," said David Barclay, the CCCN's senior network co-ordinator."It's not about handling money; it's about being a point of contact," said David Barclay, the CCCN's senior network co-ordinator.
'Exploiting' need'Exploiting' need
As a first step, posters and flyers advertising local credit unions will be placed in Church of England premises.As a first step, posters and flyers advertising local credit unions will be placed in Church of England premises.
One church in London's East End, St James in Clapton, is already offering such advice to local people.One church in London's East End, St James in Clapton, is already offering such advice to local people.
It is working closely with the London Community Credit Union (LCCU), which offers loans, savings and current accounts.It is working closely with the London Community Credit Union (LCCU), which offers loans, savings and current accounts.
The LCCU is owned by, and run for the benefit of, its 16,000 members.The LCCU is owned by, and run for the benefit of, its 16,000 members.
"We still see the effects of payday lending on deprived communities and the way they exploit people's need for credit," said Mr Barclay."We still see the effects of payday lending on deprived communities and the way they exploit people's need for credit," said Mr Barclay.
"We need alternatives," he said."We need alternatives," he said.
The scheme is being supported by Sir Hector Sants, the former head of the city regulator, the Financial Services Authority.The scheme is being supported by Sir Hector Sants, the former head of the city regulator, the Financial Services Authority.
He said he was confident that the scheme "will equip churches to be even more relevant to their local communities, and transform the lives of the many people we hope will be served as a result".He said he was confident that the scheme "will equip churches to be even more relevant to their local communities, and transform the lives of the many people we hope will be served as a result".
Sir Hector, who chairs the Church of England's task group on credit unions, told the BBC that the group was talking to many institutions involved in community finance, including large banks, who have "a key role to play".
Illegal lendersIllegal lenders
Across the UK, there are now more than 400 credit unions, with over a million customers.Across the UK, there are now more than 400 credit unions, with over a million customers.
Because they are owned by their members, they can offer cheaper loans, and better savings rates, than many other lenders.Because they are owned by their members, they can offer cheaper loans, and better savings rates, than many other lenders.
Not all of them offer payday loans - ie, loans over a month - but some, like the London Mutual Credit Union, do so.Not all of them offer payday loans - ie, loans over a month - but some, like the London Mutual Credit Union, do so.
It advertises a £400 loan for a month at a cost of £12. Wonga, the online lender, charges £41.62 for the same loan.It advertises a £400 loan for a month at a cost of £12. Wonga, the online lender, charges £41.62 for the same loan.
The Archbishop of Canterbury, Justin Welby, has also campaigned for the cost of such loans to be capped.The Archbishop of Canterbury, Justin Welby, has also campaigned for the cost of such loans to be capped.
The Financial Conduct Authority (FCA) is due to announce plans for a cap next month.The Financial Conduct Authority (FCA) is due to announce plans for a cap next month.
They are due to come into force in January 2015.They are due to come into force in January 2015.
However, the payday industry has warned that any cap could result in people turning to illegal lenders, otherwise known as loan sharks.However, the payday industry has warned that any cap could result in people turning to illegal lenders, otherwise known as loan sharks.
"If the regulator continues to turn the screw and drive reputable lenders out of the market, these borrowers will be forced to look for credit elsewhere," said Russell Hamblin-Boone, the chief executive of the Consumer Finance Association, which represents some of the lenders."If the regulator continues to turn the screw and drive reputable lenders out of the market, these borrowers will be forced to look for credit elsewhere," said Russell Hamblin-Boone, the chief executive of the Consumer Finance Association, which represents some of the lenders.
Have you sought financial help? Have you used a credit union? You can email your experiences to haveyoursay@bbc.co.uk using the subject line 'Financial advice'.Have you sought financial help? Have you used a credit union? You can email your experiences to haveyoursay@bbc.co.uk using the subject line 'Financial advice'.