The Archbishop of Canterbury Justin Welby, the principal leader of England's state religion, the Church of England, plans to force payday loan sharks out of business. The Church already invests in businesses, and is looking to invest money in credit unions to help them compete with high-interest lenders. The payday loan industry is worth around £2 billion ($3.1 billion) in the UK, and successful companies such as Wonga make hefty profits by charging 5,853 APR on short-term loans.

"We're not in the business of trying to legislate you out of existence..."

The Church has long spoken out against payday loan merchants, advocating the use of community-owned credit unions instead. Recently, however, Welby revealed the details of a conversation he had with Wonga co-founder and CEO Errol Damelin. Speaking to Total Politics, Welby said, "I’ve met the head of Wonga and I’ve had a very good conversation ... I said to him quite bluntly, we’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence."

"... we're trying to compete you out of existence."

Because of the close links between Church and state in the UK, Welby is well positioned to do both. The Church of England has 26 seats — referred to as the "Lords Spiritual" — in the House of Lords, and a representative MP in the House of Commons. Welby himself sits on the Parliamentary Commission on Banking Standards, which concerns itself with tracking the UK's banking sector. He believes supporting and expanding upon the credit unions already in the UK, helping them become more professional and better known in the community, will defeat pricier lenders.

In a complex twist, it was revealed recently that the Church of England had indirectly invested in Wonga, the very company it's name-dropped in its fight against payday loans. Although the investment of £75,000 is very small, Welby notes that "it shouldn't happen, it's very embarrassing ... I was irritated for a few minutes but, you know, these things happen. I understand the business, it's an incredibly complex business."

Government Business Secretary Vince Cable yesterday publicly backed Welby's plans. Cable said the Archbishop was "right not just to condemn abuse but to offer alternative which are more ethical... We're looking at whether we can stop advertising drawing people into payday lending who perhaps shouldn't be using it." Wonga CEO Damelin says he is "all for better consumer choice," and welcomed the Church's challenge.