Friday, July 26, 2013

Church of England - the Bank that likes to say Bless


From Brother Ivo:

Brother Ivo takes his name from the Breton saint, St Ivo of Kermartin, who was known by those who knew and loved him as the 'Advocate of the Poor'. What could be a greater expression of Christ's teaching than that? The poor will always be with us, especially once we re-define the term away from the original, absolute, definition towards that of the Marxist/ Politically-Correct version rooted in relativism. Even so, Christ reserved a special place for them in his heart, and warned the rich that their prosperity - or, more accurately, the distractions it can bring - can be an impediment to living life as God intended.

Accordingly, it had has gladdened the heart of Brother Ivo - and doubtless that of the Saint and Christ himself - to hear Archbishop Justin applying his business acumen towards alleviating the plight of the poorer members of society.

The fact that poorer people are indeed still members of society needs to be re-emphasised. In an increasingly individualist society, we can easily look to the interests of ourselves and those we love, to the detriment of our neighbour.

When the rich young man asked, "Who is my neighbour?" he was trying to sort out the extent of his duties in the context of the teaching. Today, whole sections of society not only do not know their immediate domestic neighbours but also know very few people outside of their station in society.

Archbishop Justin is making sure we help our neighbours by informing the UK payday loan company Wonga that, having already established a Credit Union for Anglican clergy and staff, he is ready to develop the initiative to the wider community and offer existing small institutions the opportunity to expand their operations using church buildings. No doubt, having set the ball rolling, our friends in the URC and Roman Catholic churches will also offer their premises to ensure the network reaches all parts of the country. That said, the Established Church's presence in every part of the country makes its involvement especially helpful.

Archbishop Justin's initiative should be welcomed on two levels. Its liberation of the needy from what he rightly describes as usurious rates of interest is important, but there is another equally significant dimension. It could be the start of re-establishing the community/'working class' institutions destroyed in the 1980s.

To reference those times invites the unthinking to respond that it was all Thatcher's fault that communities were overwhelmed with change, and yet the Archbishop's call to social responsibility necessarily indicts many of us with a degree of blame as well.

The carpet-baggers may have conceived their attacks on the building societies and mutual-aid funds established by the thrift and prudence of our Victorian and Edwardian forebears in those pre-welfare-state days, but many of us spread small sums across various institutions in the hope of reaping windfall benefits.

Thus we saw the demise of local building societies, small-payment savings societies - some built from ethical, temperance and, yes, socialistic idealism. As with the utilities, Sid bought his shares and sold them for a quick profit.

None of those of us who did this is in any position to criticise corporate raiders: at least the likes of Bain Capital tends to leave a revitalised economic enterprise behind. All we ended up with from our voluntary destruction or the massive degrading of the mutual sector was a pile of holiday snaps and a mountain of VHS video recorders.

Yet there is room for optimism. People can and do make ethical economic decisions, as the several ethical investment funds demonstrate. Even during the loads-a-money 80's, some of us put our money where our green rhetoric was by creating and supporting the Ecology Building Society. They made loans on properties that made sustainable sense but were ruled out by the sharply-contracting market, which saw previously local discretions removed to ever higher and inflexible levels. It can be hard to challenge when 'computer says no'.

We all seem to hate the banks that needed our taxes to bail them out because they were too big to fail. Archbishop Justin may be leading us towards a better alternative. If we can re-create the institutions made for and by the ordinary decent members of society, and offer fair and secure lending and borrowing practices whilst paying and treating staff decently, what's not to like?

Brother Ivo warmly welcomes the strategy under-pinning this initiative. It is more imaginative and participatory than calling on government or adding to the legislative programme.

If we really don't like the financial institutions we have, or their practices, we can build new ones more to our liking. That is what the Victorians did and also what the Greens did in a small way. And let us not forget the micro-finance models that bring hope and transformation in the Third World. There is every reason to see this as a viable and popular alternative savings vehicle for the many as banks begin seeking new ways to increase their revenue streams.

Plainly the big institutions will continue, but the vision to restore genuine choice and competition is a refreshing innovation, or rather a re-invention.

There is a further implication. Len McCluskey is falling out with the Labour Party and may be withdrawing significant funds from their present investment in spads, think-tanks, pollsters, spin doctors and all the other hangers-on of modern politics.

Imagine if UNITE and other unions turned away from trying to capture big government and instead channelled funds into a renewal of the old Labour movement with its mutual funds clubs and co-operative shops with dividend distribution and delivery using modern technology and logistics. How might that regenerate the towns and communities that are struggling today?

Building a community-based alternative to a disfavoured sector is not only good in itself, but also offers a challenge to thinking beyond the present narrow modes of political ideology. Is smaller-scale, independent, competitive, ethical finance a development of the political paradigm of the left or the right?

Who knows? Who cares?

27 Comments:

Blogger Mrs Proudie of Barchester said...

Goodness! How splendid - I shall instruct My Lord to start selling indulgences as soon as I can rattle them off my Hewlett Packard...

26 July 2013 at 09:32  
Blogger Jay Bee said...

We need to be “salt & light” in the world. Taking advantage of the financially desperate is despicable.
War on Wonga is a great initiative despite the subsequent revelation that the CofE has inadvertently funded this usurious moneylender in the past.
Good for the CofE I say. Get the Abbey habit. Heavens local bank. Let's hope other denominations will also sign up to this.
On the “too big to fail” issue there is a lot to be said for smaller independent financial firms. Spreading risk and increasing independence reduces the chance of systemic collapse.
One slight quibble Ivo. I think you'll find it was an expert in the law who asked “who is my neighbour?” The rich young man asked “what must I do to inherit eternal life?”

26 July 2013 at 10:05  
Blogger Manfarang said...

Re-establish the Trustee Savings Banks. This is the best model.

26 July 2013 at 10:19  
Blogger david kavanagh said...

Manafrang,

FYI- Lloyd's is being forced to flog it off in a IPO. It was going to be sold to a mutual the Co-op. Until it was discovered there was a massive capital black hole in their books. And nationwide the other mutual is being told to raise a £1 billion. Good advert for mutuals no?

And the C of E is also part of a consortium to buy branches of the RBS. Oh and it also indirectly funds Wonga...

whose business model is to fund short term loans, the high interest rate is applicable if you were making payments for the whole year. Apparently its client base appeals to young affluent, rather than the traditional payday lender.

Besides which people still want cash. Given that the traditional banks won't lend to anyone. There is clearly a gap in the market.

As for the bit about bringing back mutuals. Which government was responsible for flogging off the biggest set of mutuals in the 1980s and 1990s? (halifax, abbey etc etc).

26 July 2013 at 10:26  
Blogger Richard Watterson said...

I applaud the Archbishop for trying to move the Church away from issues that only serve to damage it, and towards areas that have the potential to enhance its credibility. This is the kind of leadership the church needs.

26 July 2013 at 11:14  
Blogger Mr Integrity said...

Bro Ivo,
'ethical finance a development of the political paradigm of the left'?
Is this the greatest need of the poor? It is a shame that the ABC was not more passionate about the more spiritual issues of the day. Evangelism and nurturing of the flock should always be the prime responsibility of the ministry. Caring for the poor can only come from a heart that loves God. If the poor are turned towards God, their circumstances usually change. The U turn of the ABC on SSM which will have a major effect on the morals of society in the longer term, is more vital than providing short term cash.
For ye have the poor always with you; but me ye have not always. The words of Jesus approve the helping the poor, but He must be put first. Additionally, if there are poor, there must be rich and we need the rich to be able to help the poor, unless you are a deluded Communist and think we can level everything out.
As a business man, I realise that there will always be the rich and so target our products towards the rich who are recession proof. We believe that this is Godly wisdom.

26 July 2013 at 11:29  
Blogger Mr Integrity said...

Richard Watterson said "move the Church away from issues that only serve to damage it,".
The truth and the Gospel of Jesus are often not palatable. That is why the CofE has become a centre for socialist propaganda and activism. This may be more palatable but of no effect in the growth of the Church. It a false premise that the Church should seek to be popular.

26 July 2013 at 12:09  
Blogger Lucy Mullen said...

The key to success is usually to hit one note and hit it really really well. So what is it that the church needs to do well? Well it is not financial services. It is spirituality and prayer. It is not being the local post office, it is spirituality and prayer. It is not being a local restaurant, it is spirituality and prayer. No one else does these things, and people do NEED them, though the Church frequently is all too half- hearted in its belief that they really do, after all. They do. When the church applies better filters to who gets ordained, has the courage and the guts and the wiliness to preach and live the gospel properly, to re-establish purity of being, including sexual purity, from the ordained downwards, and not get entangled in the demands and posturings of certain sections, then there will be renewal.

26 July 2013 at 12:10  
Blogger Gary said...

This comment has been removed by the author.

26 July 2013 at 12:20  
Blogger carl jacobs said...

These legal loan sharks ... Uh ... Payday lenders exist because they serve a niche market. That market is 'People who don't have the credit to get a loan from a normal bank.' The interest rates are high because the risk of non-payment is high. In truth, most responsible financial institutions would refuse its clientele as poor risks. So it's not just a matter of creating 'ethical banks.' Those institutions would also have to cover the risk. Otherwise they would go out of business.

If you go to a bank and say "I need £500 to pay bills" the bank will say "We don't lend money for that reason. If you need to borrow money to pay bills then how will you repay us?" This is the market served by Payday Loans. You can't serve that market as a bank without high interest rates. You could serve it as a charity. But banks cannot be charities if they are to survive.

carl

26 July 2013 at 12:31  
Blogger IanCad said...

So, now the CofE seeks to withdraw from the poor and unfortunate; and yes! the unwise, their lender of last resort.
Truly the church is treading a path on which it should not venture.

26 July 2013 at 12:47  
Blogger Lucy Mullen said...

What do they think Jesus would say about money lenders in the Church buildings.

Is it really terribly terribly hard to extrapolate this from our very own New Testament?

I am truly amazed.

26 July 2013 at 13:17  
Blogger Brother Ivo said...

Brother Jay Bee

Thank you for correctly pointing out the perils of writing too close to a deadline!

26 July 2013 at 13:42  
Blogger Brother Ivo said...

Mr Integrity,

Of course the Archbishop will have things to say on matters closer to his- and your - heart.

We ought not to infer indifference just because he addresses another important issue.

Sufficient unto the day......

26 July 2013 at 13:46  
Blogger Marie1797 said...

Well done Archbishop Welby, I think it's a chance for the Churches who offer their premises to the expanding Credit Unions to become more involved with their local communities and to spread the word.
The mainstream banks aren't really interested in small money, and at the moment they aren't even interested in lending much to anyone long term either.

There is definitely a gap in the market and the Church and Credit Unions would make a good team as long as they remain a not for profit organisation.
And because Credit Unions are small scale and more personal being local, they get to know their customers' situations. Good article Brother Ivo.

26 July 2013 at 13:51  
Blogger carl jacobs said...

Small institutions are less likely to carry high risk loans than larger institutions. The borrower does not become more credit worthy simply because he walks into a small bank. The problem is not found in the lender but in the borrower.

There is a 'fit' problem in this solution. It is creating a solution to serve the wrong market. A credit union isn't going to evaluate a high risk in a different manner from a bank. The high risk borrower will still find himself shut out, and so will be forced back to the payday lender.

carl

26 July 2013 at 14:11  
Blogger Marie1797 said...

The profiles of high risk borrowers ( people who have borrowed and not repaid in full in the past) will be known. Credit Unions are local and can drill down into the borrower's situation and ability to repay a loan, a bit like the old fashioned bank managers used to do. Credit Unions only lend up to a £1000 so no big loans. And yes, really bad borrowers might not be able to get even the smallest loan. Whether they end up at Wonga remains to be seen, because it maybe that they just need help to budget more efficiently instead of a loan. The Citizens Advice Bureau used to help out in this respect, but a lot have reduced their services and even closed down altogether.

26 July 2013 at 15:15  
Blogger Manfarang said...

David K
I said banks with an 's'
There is still one trustee saving bank- the Airdrie Savings Bank.It remained independent and didn't merge as all the others did.
I would like to see new ones in other parts of the country.
What you are referring to is more or less a commercial bank that has nothing of the trustee principle left.

26 July 2013 at 15:18  
Blogger Lucy Mullen said...

The church should not see itself, nor portray itself as a retracting and doomed to shrink organisation poking around for a "gap in the market" to pay for its buildings. Disastrous PR. Absolutely disastrous. We are the house of prayer, of encounter with Jesus in every local community.

Let the financial services sector see to the financial services. Let the church equip and support the honest people in the Finance industry to do their best and counter the dishonest in the market 9 till 5, in appropriate buildings. Our buildings have been designed and soaked in prayer to be fit for the purpose of prayer and worship, with occasional concerts, school visits, healing services and so on, not for financial booths, post offices,restaurants, estate agents, car washes and all the paraphernalia and worldly gossip of the high street. This should not even be controversial it is so obvious.

26 July 2013 at 16:54  
Blogger IanCad said...

Hat's Off to whoever cooked up the hymn board.

Very clever!

26 July 2013 at 17:13  
Blogger Office of Inspector General said...

Bloody dangerous idea. Clergymen and their families have enough odd balls knocking on their door as it is. There was even a recent murder of a priest in his home in South Gloucestershire. When it gets out there is serious money on the premises, God help them all. And yes, the Credit Union will take the cash away with them at close of business, but try convincing those ghastly characters on the take that.



26 July 2013 at 17:26  
Blogger Sobers said...

Let me get this straight.

A company that offers a nationwide 24/7 online service, with money delivered to the bank accounts of approved borrowers inside half an hour, is going to a out-competed by a few volunteers operating a (admittedly highly commendable) local credit union out of a church hall. Who will perhaps process your application to join inside a week, demand all sorts of paperwork to prove who you are and where you live etc, and MAY eventually lend you some money after talking down to you about the need to budget properly and to stop spending your giro on beer and fags.

Get real. All this little spat is doing is giving Wonga publicity for free they couldn't dream of getting from paid PR agencies. Their business will go from strength to strength (sadly, as there are always people who need cash in a hurry), and Archbishop Welby is going to end up looking like a right prat. Its like the idea of pitting the Home Guard vs the German Wehrmacht in 1940. All very well in a sitcom, a bloodbath if it had actually ever come to pass.

26 July 2013 at 18:34  
Blogger Marie1797 said...

Mock ye not oh ye of little faith!
I've just looked up my local Credit Union and they have a good user friendly website, offer online banking, debit cards, and even an ISA as well as online membership and loans.

They have three collection points as well as a mobile unit that visits towns on a regular rota basis giving advice to people on budgeting, benfits and are prepared for when the new Universal Credit comes in next year.

If they could use the Church for a lesser rent fee or for free that would enable them to have more collection points and be open longer. And why not have a little church coffee/tea shop to encourage people to stop for a cupa and a natter.

26 July 2013 at 20:26  
Blogger david kavanagh said...

Manfarang,

The TSB (s) were fused and listed thanks to Thatcher. Then bought out by Lloyd's, then because Lloyd's bought another bank thanks to the taxpayer (HBOS- Halifax, a former mutual turned bank, owned by a Scottish bank with grandiose ideas). Mutual's are good. But when the government has a clear strategy of only bailing out those too big to fail, a mutual isn't going to get very far (even though Carl Jacobs notes they are low risk; the perversity of our current regulation is that- as noted above- low risk nationwide is forced to find a billion pounds, Bob Peston has written at length about this paradox btw).

Shabbat Shalom!

26 July 2013 at 20:49  
Blogger AnonymousInBelfast said...

"You can't serve that market as a bank without high interest rates. You could serve it as a charity."

Carl's point is spot on here.

I am a little conflicted by this statement. Overwhelmingly, I think this demonstrates Welby's ethical soundness, and frankly throws into sharp relief the poverty of action and imagination of several of his predecessors. My practical concern is that the CofE Co-Op will have to appear more like a charity than a bank for the reasons that Carl outlines - and whilst that may be no bad thing in and of itself, legally it is questionable whether the two can be rolled in together.

I remain concerned, however, by the way in which usury has been largely disregarded not only by the theologically-illiterate press, but by the CofE in general. Whilst it is unquestionable that a "pay-day lender's" 3000+ APR is usurious to a more ruinous degree, creating a business that profits (see above) from lending, even if at a fraction of the rates, is still committing usury.

I know that this probably reads like a terribly pedantic point - but usury is clearly regarded as something which a community ought not to practice amongst itself in Scripture (and if one applies the principle that, following Christ's example, all of mankind has become our community, usury ought to be outright absent).

As with so much of God's Law, much can be gained by looking at what is good: in this case, investment.

If Welby's CofE Co-Op can treat the path to making investments in people, then it will be onto something much more profoundly revolutionary. "Lend without hope of return", Jesus taught: our mission has always been to invest hope, love and faith in even the most hopeless cases.

What an answer to modern secular society: to respond to those in need by saying, and demonstrating, that all who are thirsty are worthy investments. To run according to God's economy. It would look nothing like a lender, more like a charity, and most like the Church.

26 July 2013 at 21:56  
Blogger Mr Integrity said...

Lucy Mullen has it right on the nail. Cash is not what is going to solve the problems of the pay day borrowers. If the Church wants to help these people, which it should, it could provide financial management advice so that they don't get into debt.

26 July 2013 at 23:06  
Blogger Office of Inspector General said...

Some people were put on this earth to suffer, usually by their own lifestyle choice. Let them get on with it...

26 July 2013 at 23:38  

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