Church Invested In Pay Day Loan Companies It Admonished
Originally published on Mon July 29, 2013 11:01 am
ROBERT SIEGEL, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel. The Church of England's top bishop is in a little hot water. The archbishop of Canterbury is embroiled in a controversy about ethical investment. As NPR's Philip Reeves reports, it involves a company called Wonga.
UNIDENTIFIED MAN #1: Let us greet our newly installed archbishop with great gladness.
PHILIP REEVES, BYLINE: Four months have elapsed since Justin Welby was enthroned as the 105th archbishop of Canterbury.
UNIDENTIFIED GROUP: (Singing)
REEVES: That lustily singing congregation can't have been sure what kind of leader Welby would be. He'd only been a bishop for a year. Now, they're finding out. They're discovering Welby's a little different from Rowan Williams, the man he replaced.
RUTH GLEDHILL: The last archbishop of Canterbury was a very meek and mild, gentle Jesus type of chap.
REEVES: Ruth Gledhill is religious affairs correspondent of the London Times.
GLEDHILL: This archbishop of Canterbury I see as a much more take-up-your-sword type of chap, and he's very much in the mold of the Jesus going in and turning over the tables in the temple.
REEVES: The archbishop is now flourishing that sword. Welby's a former oil executive with lots of experience in finance.
(SOUNDBITE OF AD)
UNIDENTIFIED WOMAN: Payday, payday.
REEVES: And he's taking on the money lenders.
(SOUNDBITE OF AD)
UNIDENTIFIED MAN #2: You know it doesn't matter how careful you are with money. Sometimes your pay just won't stretch far enough. That's where Quick Quid, the online payday lender, could help.
REEVES: Commercials for payday loan companies are flooding Britain's airwaves, but if you look at the interest rates over one year, they work out at several thousand percent. The archbishop of Canterbury believes payday loan companies prey on the vulnerable. In England, his church may not have very large congregations anymore, but it does have financial expertise and thousands of buildings.
Welby wants these to be used to support the expansion of community-based credit unions, offering loans at far lower rates. He wants the church to drive the pay loan companies out of business by outcompeting them. The other day, he said so to the head of Wonga, one of those pay loan companies. He won some great headlines, but then it unraveled. The Financial Times found out that the Church of England is actually an investor in Wonga.
True, the sum is only around $115,000 indirectly invested through a venture capital company. The archbishop says he didn't know, but when he spoke with John Humphrys, presenter of BBC Radio's flagship "Today" program, he wasn't comfortable.
(SOUNDBITE OF RADIO PROGRAM "TODAY")
JOHN HUMPHRYS: Good morning to you.
JUSTIN WELBY: Good morning, John.
HUMPHRYS: You must be, at the very least, embarrassed this morning.
WELBY: Yes, I am.
HUMPHRYS: And on a scale of one to 10?
WELBY: About eight.
REEVES: Investing that money in Wonga turns out to be within the Church of England's guidelines. Archbishop Welby has now ordered a review of these arrangements. Gledhill points out the church has a very large pension fund and an obligation to make money for the stakeholders. But the entangled world of finance is morally murky.
WELBY: I mean, the reality is if you invest in a hotel chain, a lot of hotel chains sell pornography in their hotel rooms. Do you, therefore, not invest in any hotel chains at all?
REEVES: The archbishop of Canterbury's concluded that in the end, a little pragmatism is required.
WELBY: We can't say that we tolerate bad things, but we've got to live in the real world. And living in the real world means that life is often very complicated and you can't escape the complexity.
REEVES: Philip Reeves, NPR News, London. Transcript provided by NPR, Copyright NPR.