Usury and Its Incompatibility with the Faith

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Cleansing of the Temple, El Greco (1591)

Usury: The lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates. (Merriam-Webster)

Are you one of the few people who ask if a faithful Catholic-Christian in good conscience may practice usury or engage in usurious practices? Now that question would pass off as something which is morally indifferent to a lot of people. Some may find the practice as fine, some may not. But why do we ask about it in the first place?

Well, why shouldn’t we ask? The teachings of the Church are for all of us and the world, and it is important to learn them—and that includes the Bride of Christ’s teaching on usurious practices.

Now what does the Church say about usury?

For starters, St. Thomas Aquinas believed that usury was against the Natural Law. Since he classified money as a consumable, then money should be treated as one would treat any other consumable. If someone gives money, that someone should not expect the doubled amount in return. That is much like you buying a person cheap, instant coffee—while expecting gourmet coffee in return.

The Bible contains something against usury in Jn. 2:14. In early Christianity, there already were writings against the practice.

For example, St. Jerome wrote on usury below:

If you gave to a prosperous person you should not have done so: but if (even so) you gave it as to a needy person, why should you demand more on the score of his being prosperous? Some lenders are wont to take small gifts of different value, not realizing that whatever is received over and above what was given is called usury and superabundance. They ought not to take more, however much it be, than was originally given by them.

Then, by Pope St. Leo the Great:

Neither do we think that it should be lightly passed over that some people, seized with the desire for filthy lucre, put out their money at usury in order to become rich thereby. And we have to complain of this not only with regard to those in clerical office but we likewise grieve to see that it holds true of lay people who wish to be called Christians. We decree that this should be severely punished in those found guilty, so that all occasion of sin may be washed away.

These two quotes from Church Fathers clearly did not find usury favorable.

The Second Lateran Council shows us an explicit condemnation of it:

We condemn that practice accounted despicable and blameworthy by divine and human laws, denounced by Scripture in the Old and New Testaments, namely, the ferocious greed of usurers; and we sever them from every comfort of the Church, forbidding any archbishop or bishop, or an abbot of any order whatever or anyone in clerical orders, to dare to receive usurers, unless they do so with extreme caution; but let them be held infamous throughout their whole lives and, unless they repent, be deprived of a Christian burial. (Second Lateran Council 13)

It is quite clear that the Church certainly condemns the practice of usury. This condemnation has its basis in scriptures, tradition, the Magisterium and common logic.

Going back to the original question on the compatibility of usury with the Christian faith, the answer is very clear: Usury and the faith don’t go together.

A rather similar post can be found here.

Jared Dale Combista

Jared Dale Combista

Iconoclast, interested in economics, history, philosophy, Catholicism and a whole lot of other stuff.

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3 thoughts on “Usury and Its Incompatibility with the Faith”

  1. Avatar

    It is very encouraging to see the defense of this abandoned doctrine of our Faith receiving more and more attention in the blogosphere. Once the current, well-advanced collapse of the usury-based global financial system progresses another crisis or two, we shall all have abundant occasion to reflect on the great mystery of God protecting the magisterium from perversion by the Austrian school, whilst permitting the prudential governance of the Church to abandon the disciplinary enforcement of Her own teaching.

    On the other side of this great, civilizational crisis, will be found the fullness of the magisterial teaching of the Catholic Church- and crucially including those hugely anomalous- and hugely regrettable- instances where the Church surrendered as a practical matter, the enforcement of the heaven-protected teaching which God had entrusted to her shepherds.

    Usury is chief among these anomalies.

  2. Avatar

    Very good point, but we must be careful not to oversimplify it. The prohibition against usury is not as simple as saying, “All charging of interest is wrong.” Steve Kellmeyer explains it well when he says, Charging interest on a loan in order to make a profit is still forbidden. However, money may be “rented”. That is legitimate.

    The principle revolves around the intent of the person lending. If I have money, I have several things I can do with it: I can use it to directly take care of the needs of my family and myself, I can use it to start a business and generate a living income for my family and myself, or I can lend it to someone else. But if I lend it to someone, I am denied the use of the money. And just as I might ask you to compensate me in some manner for the privilege of borrowing my car (because when you use my car, I cannot use it), I can legitimately ask you to compensate me in some manner for borrowing my money.

    Usury, in contrast, is charging interest on a loan for the purpose of profit. The difference here is analogous to the difference between paying someone slave wages and a just wage. The Church says you can’t force someone to work for you and if they choose to work for you, you can’t exploit them by paying them less than their work is worth. Simply paying them a pittance does not satisfy justice. Similarly, you can’t exploit someone by asking them to recompense you for the use of your money to a degree that outweighs what you would have derived from your own use of that money in other circumstances.

    I hope that helps make it clearer. It helps clarify it for me.

  3. Avatar

    Bruce points to an important concept. The distinction doesn’t show up in Aquinas, because it seems that ancient and medieval thinkers hadn’t developed a time concept of money. So when Aquinas says that interest violates the natural law, his statement is predicated on what would today strike us as very unusual premises: Aquinas’s reasoning is that interest is an attempt to create a natural increase (like the crop yielded by a plant) from a naturally sterile resource. But it’s not clear that St. Thomas’s view of the subject is entirely correct.

    As Bruce points out, interest can legitimately compensate an individual for the opportunity costs associated with lending money. Lost opportunities have value, of course: consider a farmer with a silo of seed corn ready for planting. If X destroys the farmer’s seed corn, depriving him of the opportunity to plant and harvest a crop, what should he repay the farmer, the value of the seed corn alone, or the value of the crop that the farmer could reasonably have anticipated harvesting? The answer is generally the latter. It is not at all clear that the Church condemns the value-recapturing use of interest in this manner.

    Of course, one might argue that the essence of usury lies not merely in the act of charging interest, per se, but in efforts to divorce wealth and value from tangible goods or identifiable valuable services. There’s an extended discussion on that topic in the archives of a fine blog called What’s Wrong with the World.

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