Church of England withdraws from Wonga rescue effort | Wonga

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The Church of England withdrew from an attempt to buy the loan portfolio of collapsed payday lender Wonga following a week of talks led by the Archbishop of Canterbury, Justin welby, aimed at protecting the interests of vulnerable borrowers.

The move creates new uncertainty for around 200,000 borrowers who could now be forced to repay their debts at high rates by a commercial credit company.

Welby said on Friday that the C of E commissioners, who control a £ 8.3bn investment portfolio, had decided not to participate in any buybacks, but potential investors he has been in talks with should now do. an offer for the estimated £. 400m loan book.

Welby attended a series of meetings all week and phone calls with unidentified financial investors and charitable foundations in an attempt to set up a consortium that could ultimately have resulted in the creation of an ethical payday lender.

The church said in a statement: “The church understands that confidential representations can now be made by interested parties to the administrators of Wonga’s UK loan portfolio. The Church of England will not participate in any further discussions given their commercially sensitive nature. “

The Archbishop was reportedly excited for the church to help buy the loan portfolio, as he repeatedly ran into Wonga, who was charging borrowers interest rates of up to 5,853% per annum. before rates were capped by ministers in 2015 and now stand at around 1,500%.

In 2013, he told the CEO of the company that he wanted to bankrupt him by supporting rival community loan programs.

He told the TUC conference last week, “I told the CEO of Wonga that I wanted the credit unions to compete with him for bankruptcy. Well, he’s gone!

Church commissioners reportedly argued that they lacked the expertise to properly assess the distressed loan portfolio and were concerned that the need to cancel certain loans could be legally problematic given its status as a entity created to benefit the church.

“My main concern has been to ensure that the poor and vulnerable are as well protected as possible after the collapse of Wonga’s UK business,” Welby said. “I fully support and respect the decision of the church commissioners not to participate in a potential buyout. They have given great attention to this option and I thank them for their time, advice and consideration. “

He continued, “I will continue to explore ways to make affordable credit, debt advice and support more widely available and bring stakeholders together at Lambeth Palace. If we make the economy fairer for everyone, we will also make it stronger. When prosperity and justice go hand in hand, every part of society benefits. “

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