There’s also what is considered “Buying at market” where prices of commodities, for example, change every second. Rates fall into this category. Also discounts or such for volume. There is the issue of credit rating, though, which is probably to what you’re referrring.When a butcher or a baker charge a certain amount for their product, they charge the same amount for every customer. But a lender’s product is priced differently for different people. For more information, see this reference.Code:
Yes, I believe the traditional practice was to “price” the ten-yr loan or CD at 3% over the CPI number. 30-yr would be a trad higher.Thus the reasonable and necessary charging of interest on loans. “Usury” is now reserved for taking excessive (i.e., unusually high for the economic conditions) interest on a loan because of someone’s circumstances:
, Our Sunday Visitor]. Hence loan sharks.Unless and until posters listen to the teaching of the Church they will continue to be immersed in confusion:
Session X of the Fifth Lateran Council (1515) gave usury its exact meaning: "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."
Thus the reasonable and necessary charging of interest on loans. “Usury” is now reserved for taking excessive (i.e., unusually high for the economic conditions) interest on a loan because of someone’s circumstances: The greed of the lender takes unjust advantage of the weakness or ignorance of the borrower. [See *Encyclopedia of Catholic Doctrine
You contradict yourself a lot here.But ‘excessive’ is relative, everyone has a different opinion on what falls under excessive, and who can even guess what God would consider to be excessive…but Im assuming God would see excessive usury much different than we do, and what we think is not important in the big picture, so maybe we should consider that too.
Sure, we try to justify high interest for certain reasons, of course the banks will always say they have to make a profit, but all of this doesnt matter much, what matters is how God feels about it and what he considers excessive to be, Im not sure on that, but Id be safe to say God probably does not agree with banks and other financial companies striving to make billions upon billions every year…that is definitely excessive and greed is the only cause of that, but alot of people are fooled and taken over by greed, so not really surprising.
, Our Sunday Visitor]. Hence loan sharks.Unless and until posters listen to the teaching of the Church they will continue to be immersed in confusion:
Session X of the Fifth Lateran Council (1515) gave usury its exact meaning: "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."
Thus the reasonable and necessary charging of interest on loans. “Usury” is now reserved for taking excessive (i.e., unusually high for the economic conditions) interest on a loan because of someone’s circumstances: The greed of the lender takes unjust advantage of the weakness or ignorance of the borrower. [See *Encyclopedia of Catholic Doctrine
The modern understanding of usury is the one that involves excessive interest, not the ancient definition reflected in the Council. The term is used differently now that money is used differently.If you are arguing that the Fifth Lateran Council defines the exact meaning of usury, I fail to see where anything regarding “excessive” comes into play.
I think that there are some loans where the loaner cannot reasonably doubt a full repayment. Especially in the ancient economy, where you lived in the same neighborhood as your client and knew his income just about as well as he did. In such a case you can’t reasonably doubt that he will repay you unless you loan him more than his income can cover.Furthermore, charging interest for a loan, whether excessive or not, doesn’t seem to fit this council’s definition of usury since there is definite risk is lending the money.
The possible change in the teaching about usury has troubled me. I still don’t understand how charging interest today is different than in the past. But what interests me about your comment is the implication for other social teaching. You seem to be tying the sin of usury to the essential or basic needs of a person. What is a basic need? It seems to me air, water and food are the most basic needs of man. You can also make an argument for clothing or shelter. But is anything beyond that a basic need? If not then it is interesting that a social welfare system that provides unessential things like education, medicine, cable tv, cell phones is promoted. It would seem to me that the either the basic needs of man have changed, which is impossible, or social teaching could be at odds with a tension between teachings on usury and social justice.In its ancient sense, usury was charging interest on money that someone needed to purchase items of basic necessity. Its ancient sense was tied to the way money was used in economies where money was scarce. In a poor economy, the lower class doesn’t have much money, and the money they have is almost exclusively used for items of basic necessity. When people have “extra” money, they can use it for things like recreation and expanding their income through investments. Those things aren’t necessary, and if people have a good reason to borrow money to pay for such things, it is not a sin to charge them for your loan.
Rico S #45
you are arguing that the Fifth Lateran Council defines the exact meaning of usury, I fail to see where anything regarding “excessive” comes into play. It is clearly not implied at all by the councils definition. Furthermore, charging interest for a loan, whether excessive or not, doesn’t seem to fit this council’s definition of usury since there is definite risk is lending the money.
In fact, I am struggling to come up with a real scenario that fits the Councils definition of usury
The confusion continues. Why?dmar198 #46
The modern understanding of usury is the one that involves excessive interest, not the ancient definition reflected in the Council. The term is used differently now that money is used differently.
, Our Sunday Visitor]. Hence loan sharks. Abu, you quoted my post as part of the confusion. By my reading, our posts (yours and mine) are simply backing each other up. Do you see it differently?The confusion continues. Why?
Since a lender does lose the benefits from interest. or use of his money in other ways, that’s precisely what makes the charging of interest legitimate and worthy – he has expense and risk – a great Lateran Council understanding of the use of money.
As my post #38 affirms – “Usury” is now reserved for taking excessive (i.e., unusually high for the economic conditions) interest on a loan because of someone’s circumstances: The greed of the lender takes unjust advantage of the weakness or ignorance of the borrower. [See *Encyclopedia of Catholic Doctrine
Only that by quoting Session X of the Fifth Lateran Council (1515) gave usury its exact meaning: “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”, I tried to convey that lending at interest was O.K.’d. You are correct that usury is now reserved for taking excessive (i.e., unusually high for the economic conditions) interest on a loan because of someone’s circumstances.dmar198 #49
Abu, you quoted my post as part of the confusion. By my reading, our posts (yours and mine) are simply backing each other up. Do you see it differently?
The magesterium has never ceased to condemn the practice of charging person-recourse interest on loans. Many individuals believe it acceptable, but their views are contrary to the magesterium.Hello everyone. For the past day or two I have been periodically thinking about usury. Usury is a sin. It seems to be the same thing as charging interest on a loan or something. Would it be that charging interest on a loan or other debt would be the sin of usury?
Also, I may be wrong about usury being a sin. I looked up usury in the Catechism of the Catholic Church but it did not come up with any results.