The morning news brought word that there was a “run on the bank” at the Presbyterian Mutual Society of the Presbyterian Church in Ireland.  The main page of the society now has a statement from the Directors of the Society indicating that cash levels have fallen low enough that they are forced to stop accepting withdraws.  It also indicates that they have contacted the government about financial assistance, a point echoed on William Crawley’s BBC blog “Will and Testament.”  From reading through the material it is clear that the Presbyterian Mutual Society is a separate legal entity from the Presbyterian Church in Ireland while still being associated with it and restricting Society membership to PCI members.  Unlike the PC(USA)’s Presbyterian Investment and Loan Program (PILP) the Society holds some of its assets in real estate, not just loans to churches, so the market downturn has had an impact on the net value of the assets.  Being its own legal entity the assets of the PCI are not at risk, but being a Mutual Society there is no government insurance of the deposits.  This just broke today so we will have to see how this develops.

I have been keeping an eye out for statements about financial investments at various Presbyterian branches.  I am not referring to giving, that is a story all to itself, but rather the investments held by governing bodies including pension funds.  So far there has been very little reported, as least that I have found.  In the Presbyterian Church (U.S.A.) the Board of Pensions has reported, both in their publication and the PNS article, that while the investments are down, benefits are safe.  I have seen no similar report from the Foundation, although I would expect that in their annual report.  I will offer that from our Synod there is one program that will probably not be able to access any of their designated Foundation funds because the value has fallen beneath the “floor,” but providentially a large chunk of the general assets were in short-term interest bearing investments and we have ridden through it with little loss of principle.  Likewise, PILP is, to my understanding, in cash instruments and deposits are in CD-like instruments so redemptions can be forecast more easily.  Whether churches will be able to make their loan payments is another questions.  As for other Presbyterian branches, I’ve been keeping an eye out but have not spotted news yet.

While these are recent developments there is a much longer term story out there as well.  A while back the Presbyterian Church in America established the PCA Investor’s Fund that appears like it operated much like PILP at its founding in 1985.  Interested persons or groups would invest in the fund and the money would be loaned out for church planting, expansion, or redeveloperment.  It is interesting that a news note in the Winter 1999/2000 Multiply Magazine lists 3-year deposits paying the substantially above-market rate of 8.00%.  (Current PILP rates are 3.20% for the same term.)  A Christianity Today article (July 2008 print, August 2008 on-line) describes the decline and fall of the investment company.  It was divested from the PCA in 1994 but kept its Presbyterian ties, even with its merger with Cornerstone Ministries Investments in 2000.  Shortly after the merger the company began diversifying its portfolio of assets into riskier non-church real estate, principally second mortgages.  With the real estate downturn the company ran into trouble and filed for Chapter 11 bankruptcy February 10, 2008.  There are more details, an active comment section, and a link to the actual bankruptcy form on the Georgia Bankruptcy Blog. (And I thought I had a niche blog.)  Those proceedings are ongoing but the situation does not look good for churches and individuals that invested with Cornerstone thinking the money was going for church growth projects.

So, along with the Presbyterian Mutual Society, we will see how this one develops.

And finally, a great Biblical take on this from that great lectionary cartoon Agnus Day.