The Church of England will launch an investigation into its own pension fund after it was found to have links to payday lending company Wonga. This comes the day after the Archbishop of Canterbury described Wonga s ‘Morally wrong’ and said that the Church of England wants to ‘compete’ Wonga out of existence.
The fund, which claims to have strong ethical investing policies and explicitly bans any company involved in payday lending, was found by the Financial Times to have invested in US venture capital firm Accel Partners, one of Wonga’s key financial backers.
The news has threatened to undermine the Archbishop’s outspoken comments on the payday loan industry but a Lambeth Palace statement released said: “We are grateful to the Financial Times for pointing our this serious inconsistency of which we were unaware.
"We will be asking the Assets Committee of the Church Commissioners to investigate how this has occurred and to review the holding in this pooled investment vehicle."
The reported investment is only a small fraction of the Church's £5 billion-portfolio.
Lambeth Palace added: "We will also be requesting the Church Commissions to investigate whether there are any other inconsistencies as normally all investment policies are reviewed by the Ethical Investment Advisory Group (EIAG)."
The Archbishop said he has personally met with Wonga chief executive Errol Damelin and told him: “We're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence.”
Last month, the entire payday lending industry was referred for a full investigation by the Competition Commission after the trading watchdog uncovered ‘deep rooted’ problems.
The Church of England is already in the process of setting up a credit union for its own staff but wants to make use of the 16,000 churches around the country to expand the service. This move has been backed by Business Secretary Vince Cable and he said that the Government was looking at better regulation of the industry as well as a bar on advertising high-interest loans to people who cannot afford to pay them back.
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