"The work of Credit Unions is still all too little known in most of the UK - though there are 172,000,000 members of unions worldwide, with over a quarter of the populations of the US, Canada and Australia being members. The potential is enormous.
"It is evident at the simplest level in terms of the financial burden involved in the arranging of a loan: the Credit Union makes no charges for arranging this, includes loan insurance at no extra cost and has no penalties for early repayment. Even the most reputable home credit company will be about a third more expensive than a Credit Union."
He welcomed the increasing numbers of Unions that are organising Child Trust Funds and ISAs, and providing special Christmas accounts to help prevent seasonal debt, as well as others who have set up partnerships with local CABs and housing associations, and the work through some schools to promote financial literacy.
The Archbishop warned of the dangers of the doorstep lending in relation to excessive charges and rates of interest, and praised the campaign 'Debt on our Doorstep' for their work in calling for "tighter regulation of the lending market, with a proper investigation of payday lending and a cap on charges".
"The Consumer Credit legislation of 2005 built helpfully on the last review of practice in this area by the DTI and other agencies, but shied away from a ceiling on interest rates," the Archbishop continued.
"While there is debate about the effects of capping interest rates in the world of home credit, with some arguing that it could encourage unofficial practice even worse than what now prevails, there is a growing consensus that a situation in which charges can legally be as high as they are in the world of doorstep lending is indefensible: it gives the message that borrowing is a business in which you can only be a long-term loser, and so gives a further turn to the despair and low self-esteem that afflicts those caught up in the debt spiral."
He said that more could be done to regulate the worst excesses of parts of the industry, suggesting that "a sharper regulation of the terms and methods of advertising for doorstep credit, which at present is often deliberately unclear about charges and rates of repayment, would bring some checks upon what is increasingly seen as an open scandal".
The Archbishop also welcomed government attempts to combat poverty but pointed out that current targets were unlikely to be met on child poverty - an issue likely to be taken up by over 45 major NGOs in 2008 under the umbrella coalition of the 'Get Fair' campaign.
"We can applaud the declared aim of the Government, stated in 1999, to halve child poverty by 2010, but we have to recognise that this goal is sadly unlikely to be attained on present showing.
He warned: "So serious is the prospect that over 45 major NGOs are launching later this year a national campaign, 'Get Fair', aimed at galvanising once again the commitment to end child poverty by 2020, the date originally set - and at tackling the negative and unjust image of people living in poverty that prevails in a worryingly large percentage of the population."
