Monday, January 20, 2014
Church of England appoints big hitter to battle loan sharks
Hector Sants, Britain’s former top financial industry regulator who resigned from Barclays due to stress, will lead a new financial taskforce set up by the Church of England as part of its campaign against controversial payday lenders.
The church said on Thursday that Sants had accepted an invitation from Archbishop of Canterbury Justin Welby to chair the body, called the Task Group on Credit Unions and the Financial Sector.
Welby has pledged to drive Britain’s payday lenders out of business by supporting credit unions as an alternative to their high-interest loans intended to tide borrowers over until the next pay packet.
Payday lenders such as Wonga, which charges annual interest rates of 5,853 percent, argue that they fill a gap in the market created by high-street banks retreating from riskier lending and say their loans are meant to be repaid within a month, which incurs lower interest charges.
The taskforce will support credit unions and work with the wider UK financial sector to build support for community-based financial services and encourage responsible lending and saving.
“I have long recognized that the banking sector requires cultural change,” Sants said in a statement.
Sants, 58, ran Britain’s Financial Services Authority (FSA) through the financial crisis and joined Barclays at the start of 2013. He was placed on sick leave in October and left the bank a month later after deciding he would not be able to return to work in the short term. His new position is unpaid and will take up about one day a month, the church said.