Church of England breaks ties with payday lender Wonga

Yahoo – AFP, 11 July 2014

The Archbishop of Cantebury Justin Welby speaks during a press conference

in Juba, South Sudan, on January 30, 2014 (AFP Photo/Carl de Souza)

London (AFP) - The Church of England has sold an indirect investment in payday lender Wonga, severing an embarrassing tie with the firm it accused of exploiting the poor.

Last year it emerged that the Church's financial arm had indirectly backed the company through pooled funds, shortly after Archbishop of Canterbury Justin Welby criticised Wonga and other high-interest lenders.

"The Church Commissioners no longer have any financial or any other interest in Wonga," the Church's financial arm said in a statement.

"The terms ensure that the Church Commissioners have not made any profit from their investment exposure to Wonga."

The Church Commissioners for England had strengthened restrictions to ensure there were no ethical problems with investments, the statement said.

Wonga lends to people in dire need of cash, charging a typical annual interest rate of nearly six thousand percent.

It was last month forced to pay £2.6 million in compensation after it emerged it had sent thousands of fake legal letters to pressure customers to repay loans.

Welby launched a public attack on payday lenders in July 2013, claiming they exploit the poor and vulnerable. He said the Church aimed to put Wonga out of business by supporting credit unions to compete with it.

However only a day later it emerged that the Church Commissioners had an indirect investment in Wonga, despite having named payday lenders on a list of prohibited investments.

The Church said the stake amounted to less than £100,000.

"At no time have the Commissioners invested directly in Wonga or in other pay day lenders," the Commissioners said.

"The indirect exposure of the Commissioners through pooled funds represented considerably less than 0.01 percent of the value of Wonga.

"The Commissioners are pleased that another way forward has been agreed given their fiduciary duties to clergy pensioners and to all the parts of the Church they support financially."