Is it sinful to work for a bank as a teller or a branch manager?

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Longbow76

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I’ve had a conversation relating to career paths with my college advisor and he recommended starting as a bank teller since it’s a career that has opportunity for growth and other advantages.
I know Muslims are forbidden to work on banks because of usury, I wanted to know if it is sinful for a Catholic to work for a bank.
 
Actually, many years ago, when I began business studies in college, I had almost the same identical question.

We are not Muslims. Catholic teaching allows for the collection of a fair, just amount of interest on money, in economies where the supply of money is not finite and limited, as ours certainly is not. Modern governments and central banks create money (i.e., as a means of exchange and storehouse of value added) by fiat — “it is legal tender because we say it is legal tender”.

Even in Muslim economics, if I am understanding them correctly, there is such a thing as risk sharing, where the lender is compensated in some way.
 
HomeschoolDad said:
Even in Muslim economics, if I am understanding them correctly, there is such a thing as risk sharing, where the lender is compensated in some way.
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The way one Muslim put it to me (when I was looking to sell a family property), what they will do is not pay interest, but, rather, if they cannot pay cash upfront, they will offer to pay a higher price in return for paying in installments.
 
Norseman82 said:
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HomeschoolDad:
Even in Muslim economics, if I am understanding them correctly, there is such a thing as risk sharing, where the lender is compensated in some way.
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The way one Muslim put it to me (when I was looking to sell a family property), what they will do is not pay interest, but, rather, if they cannot pay cash upfront, they will offer to pay a higher price in return for paying in installments.
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That makes sense. Money now is more desirable than money later (unless, of course, you don’t need it now, but you know you will need it later).
 
HomeschoolDad said:
That makes sense. Money now is more desirable than money later (unless, of course, you don’t need it now, but you know you will need it later).
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It also may be a legal technicality in Islam because the prohibition against interest might also be against paying interest, which would disallow them from taking out a mortgage (which was the context of the conversation I had with him).
 
My bank pays me about a quarter of 1% on my savings. Is that usurious? Should I insist that they pay me nothing? What does moral theology say about negative interest rates?
Working as a teller is OK but there might be better chance for advancement in the home loan department or in wealth management.
 
JimG said:
My bank pays me about a quarter of 1% on my savings. Is that usurious? Should I insist that they pay me nothing?
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To reiterate: the Church does not condemn the just, fair, reasonable taking of interest in an economy such as ours, where money is not limited to a finite, unchanging amount (e.g., “there is a total of $1 trillion dollars in circulation, and there will never be any more than that”).

One-quarter of one percent interest is by no stretch of the imagination usurious. In fact, it’s pretty meager. I am quite sure the bank is making far more than .25% on their loans. I would be finding a better rate if I could.
JimG said:
What does moral theology say about negative interest rates?
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I am 99.9999% sure that moral theology doesn’t address this at all.
JimG said:
Working as a teller is OK but there might be better chance for advancement in the home loan department or in wealth management.
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Very likely. Banks, like any other business, reward sales and production. Tellers are, to some extent, able to increase business by offering new products, and so on, but the big money is in loan originations and wealth management, as @JimG points out. Compared to this, tellers are just basically clerical workers who contribute nothing to the bottom line. I tried to get into financial advising for a couple of the big firms, but the basic job requirement — really the only job requirement — was “how many rich people do you know and how much do you interact with them?”. I came to think of it as “the employment office of the Episcopal Church” — a lot of Episcopalians have money. I knew two Episcopalians, one a layman, the other a priest, who were financial advisors for the same prominent firm. Good fit.

Being well-connected politically doesn’t hurt anything either. But very often you have to sell big pieces of your soul, to get that well-connected.
 
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Longbow76 said:
I’ve had a conversation relating to career paths with my college advisor and he recommended starting as a bank teller since it’s a career that has opportunity for growth and other advantages.
I know Muslims are forbidden to work on banks because of usury, I wanted to know if it is sinful for a Catholic to work for a bank.
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Fifth Council of Lateran, session 10 (Julius II and Leo X) would be relevant. Discussing one of the views they write: “For, that is the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk.”. They do not write that this definition is wrong, thus, presumably, it is correct.

But nowadays there are significant risks concerning lending. The debtor can go bankrupt, value of money can decrease because of inflation. Earlier inflation was negligible, debtors who could not return their debts might have ended up in a prison, thus such risks were much lower.

Also, loans are not the only thing banks work with. For example, banks can help people to pay for goods they are buying via the Internet, they can help them trade stocks in stock market.
 
JimG said:
My bank pays me about a quarter of 1% on my savings. Is that usurious?
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Usury is not the interest a bank pays you, it is the interest they require of you to loan money to you.

Jesus tells of the servants with the talents, that the servant given one talent was upbraided for not practicing a kind of usury by investing his one talent so he would have the interest on top of the talent to return to his master.

Greedy men exist in all career tracks, giving unfair transactions.
A Catholic will sell tents, like St.Paul, but fairly and be known where he works for his honesty. The same if he works as a banker.
 
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It’s fine. Catholics do not consider banks or the financial business generally to be usury, as long as the bank or financial organization is honest, abides by the laws, and is not predatory in its practices, in other words it isn’t trying to rip off people who don’t have the money to pay or are not smart enough to know they are being fleeced.

At this point, the US financial industry is so heavily regulated due to past scandals and abuses, that the amount of stuff I have to sign to do something simple like open a new account is verging on ridiculous.

There are a lot of things we need banks and tellers for, such as opening new accounts, financing cars and home improvements, and every time I travel I need to get foreign currency and if I don’t get it from the bank I have to pay more to get it at the money exchange place. You would actually be helping people to do things they need to do. Nothing at all bad about it.
 
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MPat said:
Fifth Council of Lateran, session 10 (http://www.legionofmarytidewater.com/faith/ECUM18.HTM#10 ) would be relevant. Discussing one of the views they write: “For, that is the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk.”. They do not write that this definition is wrong, thus, presumably, it is correct.
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From the same site:

[W]e declare and define, with the approval of the sacred council, that the above-mentioned credit organisations, established by states and hitherto approved and confirmed by the authority of the apostolic see, do not introduce any kind of evil or provide any incentive to sin if they receive, in addition to the capital, a moderate sum for their expenses and by way of compensation, provided it is intended exclusively to defray the expenses of those employed and of other things pertaining (as mentioned) to the upkeep of the organisations, and provided that no profit is made therefrom.

In other words, origination, underwriting and closing costs.

I am taking it on faith that, since the Church does not condemn interest-taking in our modern economy, and has not condemned it for a long time, such interest-taking is morally acceptable. On the other hand (yes, I know, “one-handed economists”…), it has never made sense to me how you can rent anything under the sun — a car, a candelabra for a wedding, a movie, an apartment, anything — but, at least according to the Church in medieval times, you could not “rent money”. I also submit that if a lender is deprived of the use of his money for a period of time — because he’s loaned it to someone else — he needs to be compensated for that loss in some way, the lost opportunity to use that money for investment, hiring laborers, capital expenditure, whatever.
 
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Payday loan operations, on the other hand, toe a fine line as being usurious. Besides taking huge advantage of people that often have little to no knowledge of how compounding interest works, they just me the creeps in general. I’ve heard defenses of their operations as helping the poor make it to the next payday…but I’m not buying it. They take advantage of low paid workers, pure and simple!
 
“One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made”

 
patrick9999 said:
“One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made”
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So what are your thoughts on the fact that the Church no longer condemns this practice?
 
Pattylt said:
Payday loan operations, on the other hand, toe a fine line as being usurious. Besides taking huge advantage of people that often have little to no knowledge of how compounding interest works,
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Well, yes, there are plenty of borderline dishonest / predatory financial businesses out there. Some examples would be
  • payday loan businesses
  • rent-to-own furniture (the rent often far exceeds the normal price/ value of the item)
  • some auto loans
  • some money wire services
  • many shady investments
  • home equity loan companies that are looking for you to miss payments so they can take your house
The list goes on and on and on.

Government regulation and law and other risk-hedging concepts like insurance have fixed a lot of the problems with lending by standard corporate banks. No such structures existed when the Church taught against charging interest on loans; most people in need of money in those days simply did not have the wherewithal to pay the interest, and they could suffer very greatly if they didn’t have the money to pay up - they could be sold into slavery, they could be thrown in prison. Nowadays in USA they would likely just get a bad credit score.
 
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