* Taskforce will support credit unions
* Sants left Barclays due to stress in November
By Matt Scuffham
LONDON, Jan 16 (Reuters) - Hector Sants, Britain's formertop financial industry regulator who resigned from Barclays due to stress, will lead a new financial taskforce setup by the Church of England as part of its campaign againstcontroversial payday lenders.
The church said on Thursday that Sants had accepted aninvitation from Archbishop of Canterbury Justin Welby to chair the body, called the Task Group on Credit Unions and theFinancial Sector.
Welby has pledged to drive Britain's payday lenders out ofbusiness by supporting credit unions as an alternative to theirhigh-interest loans intended to tide borrowers over until thenext pay packet.
Payday lenders such as Wonga, which charges annual interestrates of 5,853 percent, argue that they fill a gap in the marketcreated by high-street banks retreating from riskier lending andsay their loans are meant to be repaid within a month, whichincurs lower interest charges.
The taskforce will support credit unions and work with thewider UK financial sector to build support for community-basedfinancial services and encourage responsible lending and saving.
"I have long recognised that the banking sector requirescultural change," Sants said in a statement.
Sants, 58, ran Britain's Financial Services Authority (FSA)through the financial crisis and joined Barclays at the start of2013. He was placed on sick leave in October and left the bank amonth later after deciding he would not be able to return towork in the short term. His new position is unpaid and will takeup about one day a month, the church said.
A former oil executive, he served on the ParliamentaryCommission on Banking Standards last year, which has played aprominent part in shaping the debate over UK banking reform.