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thinkandmull
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If usury is a sin, isn’t the financial fabric of the country immoral?
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Trekker47
Guest
Depends. I recall once reading an article (not sure where, I might be able to find it again) which pointed out that the whole usury thing came up, money was far more static than it is today. Loaning money and getting back pretty much any sum more than you gave meant a profit. Nowadays between inflation and the money you could be earning through investment if you hadn’t loaned out your money, you’re losing money unless you get it back with some kind of addition. Loans with a fair interest rate aren’t necessarily usury, obviously loan sharks and the like are. I assume it’s loans you’re talking about. 
Edit: Found it, 2nd to last paragraph is what I was referring to. It’s a decent article if you’re interested in the topic - newadvent.org/cathen/15235c.htm
Edit: Found it, 2nd to last paragraph is what I was referring to. It’s a decent article if you’re interested in the topic - newadvent.org/cathen/15235c.htm
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TxGodfollower
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Usury is usually defined as excessive interest. Modest interest is okay, but charging someone 100% interest a year is clearly nuts. I am not sure if any theologians have made an exact point where reasonable interest ends and usury starts.
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tabycat
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If the limit is 10% some people in in *deep *****trouble. I’ve heard of a credit card company was trying to charge something like 59.99% yearly interest (in the fine print)!
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TxGodfollower
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I haven’t heard of a 10% limit but that doesn’t make sense to me. A single rate doesn’t take into account the inherit differences with different kinds of loans. Consider a mortgage and a credit card. Don’t pay your mortgage, they take the collateral (your house). Don’t pay your credit card, and its harder for them to get their money back. Because of that, I think it is fair for them to charge a higher rate.
Also, interest rates change dramatically over time. For the first half of the 1980s, the US government was paying over 10% on its 30 year bonds. The rate that the Federal Government gets is much lower than any consumer could hope to get (advantage of being able to print money). If the limit was 10%, during that time there would be no “legal” borrowing.
I think the only way to establish a limit for what is fair and what isn’t would be a multiple. Like, up to 3x the current 30 year treasury.
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ag11
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If both parties benefit, as in a business transaction, then it’s fine. So for example if you get interest in a bank account, mutual fund, or even lend someone for a business, then it’s ok because everyone involved benefits.
Abuse, and situations where someone is being taken advantage of is morally wrong. If one party lends to another, and that person needs the money to survive (food, rent, ect…) then there should be no interest charged as this is a sin. Here, we are called to be Charitable, not take advantage of / “rip-off” our neighbor. The money can be paid back, but nothing more in such situations.
I believe this is pretty much how it works. God Bless
Abuse, and situations where someone is being taken advantage of is morally wrong. If one party lends to another, and that person needs the money to survive (food, rent, ect…) then there should be no interest charged as this is a sin. Here, we are called to be Charitable, not take advantage of / “rip-off” our neighbor. The money can be paid back, but nothing more in such situations.
I believe this is pretty much how it works. God Bless
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pnewton
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If one reads all the Bible says about lending money, he finds more than just references to interest. For example, one could use his cloak as collateral, the only garment he owned to protect him from the weather. For this reason the cloak was to be returned at night. So, while monetary interest was not collected, the lender could receive something else of value, as long as it was limited and presented no hardship.
I do not doubt that many lenders today engage in predation upon the needy. There are some companies that I could never work for in good conscience, as their tactics are usury. One can mistreat the poor in ways other than just threatening to break a leg if a loan is not paid, though loan sharks are the most obvious example of sinful usury.
I do not doubt that many lenders today engage in predation upon the needy. There are some companies that I could never work for in good conscience, as their tactics are usury. One can mistreat the poor in ways other than just threatening to break a leg if a loan is not paid, though loan sharks are the most obvious example of sinful usury.
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JAM47
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I have members of my family that hold to the “old” definition of usury which states that it is ANY amount of interest. I believe that the current Cannon Law makes no mention of usury. A previous Cannon Law instructs Catholic institutions to pay off their loans as quickly as possible, which seems to give tacet approval of loans at interest. The definition in Fr. John Harden’s Catholic Dictionary refers to excessive interest. Even Pope Francis’ condemnation of usury seems to refer to excessive interest. One translation calls it “loan sharking”. However, I cannot find anything that gives a definitive definition of usury. Can anyone point me in the right direction?
Thanks and God Bless
Jim
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Rau
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Has “usury” ever been defined to be simply “interest”? We talk about “usurious” rates of interest, etc. - meaning unconscionable or unreasonable.
My recollection of the relevant bible versus speaking against charging “interest” is that they are in the context of the obligation to give charitably when that is called for, rather than extracting profit from those who in fact stand in need of charity.
The First Reading at Mass on 26 Oct 2014 (Exodus 22:20-26) is a case in point.
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JAM47
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I don’t have my references in front of me, but I believe the definition of any interest was put forth in an encyclical from the 1700’s and reaffirmed in the late 1800’s. Those who support this stance state that the “official” definition has not changed since then. I can find official proclamations that “seem” to support the definition of “excessive interest”, but cannot find that clearly stated. Even Fr. John Harden’s Catholic Dictionary is seen by those of the opposing view as “non-authoritative”
I will be away from home for a few days, but could track down the documents from previous centuries.
I will be away from home for a few days, but could track down the documents from previous centuries.
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JimG
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When the Federal Reserve has a stated policy of causing 2% inflation per year, then I’d better be able to get at least 2% interest to stay even.
Currently your money is losing 2% per year in value, while your bank is paying you one quarter of one percent interest on savings! Now *that *is an injustice!
Currently your money is losing 2% per year in value, while your bank is paying you one quarter of one percent interest on savings! Now *that *is an injustice!
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andrewstx
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Actually during the Middle Ages Christians were forbidden to charge or collect any interest at all. The only people allowed to collect interest were the Jewish people.
That is where the bigoted myth of the money hungry Jew came from originally and in some individuals it persists to today.
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Scottgun
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Usury really doesn’t depend on the amount of interest. Rather, it is interest on a loan where there is no just title to interest. What falls under that category I’ll leave to others to hash out.
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Rau
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Lending a poor man money, with interest, when he in fact stands in need of charity.
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JAM47
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I like that answer Rau. Charity should always come first. What if a man is not poor and uses the money, not for food, clothing or shelter, but for gain?
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Rau
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If the man received the money as charity, I assume he misrepresented himself. If he received it as an interest bearing loan, then that is enterprise. No problem.
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JAM47
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The argument I am facing is that there is no legitimate use of interest. Their strict definition is that interest IS synonymous with usury. My argument is that the church now defines usury as EXCESSIVE interest. I realize that presents the problem of when does interest become excessive. My problem is that I cannot find a definitive decree of the definition.
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Rau
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Those in your family with a different view to your sources might like to present their sources to you, and that might provide more matter for debate.
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manualman
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The basic moral principle involved is that it is unjust to take unfair advantage of someone who needs a loan. Whether that means that ZERO interest is the line or 10% or 18.76% is situational and depends on economic circumstances present in society. The church has the authority to rule on the basic moral principle, but the church has no charism of infallibility in matter of economics. Therefore, she rules usury to be a sin, but is unable to infallibly declare precisely when a loan becomes usurious. Especially in these days of convoluted economics!
In a society where cash was a parking place for excess wealth and economics was primarily barter and trade, any charging of interest might have been usurious since there was no inflation. But in eras where prices go steadily up forever, it would be unjust to the LENDER if you had to give out mortgages at 0% and effectively get back far LESS real money after 30 years than you started with.
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