Loan shark might fall prey to Church of England

[sancho panza]

Hattip @Yellow_Reduced_Sticker

Straight from the Daily Mash.In the name of Charridee, the CoE weighs whether to buy the loan book to rescue the poor from the hands of vicious financial loan sharks who will charge more than Wongas 1,500% APR.

Apparently it'll be not for profit.Be interesting to see how that works out.

 

 

https://www.bbc.co.uk/news/uk-45534283

'The Church of England is to meet to consider leading a buyout of the collapsed payday lender Wonga.

Wonga went into administration last month, prompting concern that the debts of thousands of borrowers could be passed to another high-interest firm.

Last week, MP Frank Field called on the Archbishop of Canterbury to lead a consortium of "good people" to stop it being sold to "another loan shark".

A church spokesman said it was "reflecting" on what might be possible.

Administrators were officially appointed last month to conduct an "orderly wind-down" of Wonga.

'Exploitation of poor'

Following the collapse, Mr Field wrote to Archbishop of Canterbury Justin Welby to express concern that borrowers could be ripped off if another payday lender bought the firm.

He said Wonga's loan book was likely to be sold at a "knockdown" rate, which risked the possibility of the "exploitation of the poor".

Mr Field said buying Wonga's £400m loan book would protect 200,000 borrowers from having to make repayments to another lender at high commercial rates.'

 

 

[Bricks & Mortar]

Loan sharks who will charge more than 1500%?

Isn't 1500% the maximum allowed under the regulations that were brought in after the CofE talked down Wongas previously successful business model?  And the new rate led to Wonga going bust?

[leonardratso]

didnt the church just slag off amazons lack of tax and worker exploitation, only for it to be revealed that they own a shit load of amazon shares?

Hypocritical bastards.

Church saves feckless bastards should be the headline.

Apart from the fact that whoever owns the load book, it wont be repaid anyway so they might as well just write it off.

Of course the church would never exploit the poor.

[ashestoashes]

to kick them out of the temple you need to invite them in first

[UnconventionalWisdom]

I don't understand how this could make the church look good. Either they take it over and charge stupidly high rate (morally wrong), or they charge normal rate and go bust leading to it getting sold off to another wonga-type business. 

[sancho panza]

4 hours ago, Bricks & Mortar said:

Loan sharks who will charge more than 1500%?

Isn't 1500% the maximum allowed under the regulations that were brought in after the CofE talked down Wongas previously successful business model?  And the new rate led to Wonga going bust?

UK has no usury laws.

Certainly fulfils any definiton of usury as far I can see effectively where the interest bill is higher than the debt.

https://en.wikipedia.org/wiki/Usury

'The term may be used in a moral sense—condemning, taking advantage of others' misfortunes—or in a legal sense where interest rates may be regulated by law. Historically, some cultures (e.g., Christianity in much of Medieval Europe, and Islam in many parts of the world today) have regarded charging any interest for loans as sinful.

Usury and the law

 

 

"When money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use, the increase is called interest by those who think it lawful, and usury by those who do not." (William Blackstone's Commentaries on the Laws of England).

United States

Usury laws are state laws that specify the maximum legal interest rate at which loans can be made.^[42] In the United States, the primary legal power to regulate usury rests primarily with the states. Each U.S. state has its own statute that dictates how much interest can be charged before it is considered usurious or unlawful.^[43]

The making of usurious loans is often called loan sharking.'

4 hours ago, leonardratso said:

didnt the church just slag off amazons lack of tax and worker exploitation, only for it to be revealed that they own a shit load of amazon shares?

Hypocritical bastards.

Church saves feckless bastards should be the headline.

Apart from the fact that whoever owns the load book, it wont be repaid anyway so they might as well just write it off.

Of course the church would never exploit the poor.

Good spot.

https://www.telegraph.co.uk/news/2018/09/14/archbishop-faces-questions-amazon-zero-hours-hypocrisy-church/

'Disclosed investments, which make up 6.7 per cent of the Church's total investable assets, include Amazon, Alphabet, which is Google's parent company, and HSBC, which have all been embroiled in scandals over tax avoidance. '

4 hours ago, UnconventionalWisdom said:

I don't understand how this could make the church look good. Either they take it over and charge stupidly high rate (morally wrong), or they charge normal rate and go bust leading to it getting sold off to another wonga-type business. 

I don't understand it either.What are they going to do?

Clearly 1500% wasn't enough to keep Wonga solvent,so quite how they'll charge less interest and stay solvent I don't know.

[Bricks & Mortar]

Backstory:

https://www.ft.com/content/3c3bab76-55a4-11e3-96f5-00144feabdc0

Gideon moves to impose cap on cost of payday loans (2013)

https://www.bbc.co.uk/news/business-28257351

Church of England ends Wonga investment (summer 2014)

https://www.bbc.co.uk/news/business-30000472

Payday loan charges cap announced by FCA (Nov 2014)

https://www.bbc.co.uk/news/business-40044871
New payday loan regulations come into force (2017)


 

[Bricks & Mortar]

I'd say its most likely the CofE will be seeking repayment of the debt... possibly on better terms, or longer to pay, and writing off some that can't be collected.  They won't be handing out more though.

It appears as though the CofE is acting in concert with other parts of the establishment here - with government and FCA doing their bit too.  Almost like they're kicking off a debt deflation or something.