The 2004 Compendium of the Social Doctrine of the Church makes it clear: “The use of usury is morally reprehensible.”
There is a common misconception in the modern world that the Catholic Church no longer views usury as a sin. This is partly due to the modern definition of usury, which views it as charging a high or unfair amount of interest – a rather ambiguous definition. However, this is not how the Church defines usury.
The Fifth Lateran Council (1512-17) States that “the crime of usury or injustice, i.e. a clearly defined evil”, must be avoided, for the Lord “has bound us by a clear commandment that we should not expect any increase in capital when we give a loan, for such is the true meaning of usury: when, from its use, a thing which produces nothing is applied to the acquisition of gain and profit without any labor, any expense. nor any risk.
1745 encyclical of Pope Benedict XIV Vix pervenit wear also defined and condemned:
The nature of the sin called usury has its place and origin in a loan agreement. This financial contract between consenting parties requires, by its very nature, that one only gives back to the other what it has received. The sin lies in the fact that sometimes the creditor desires more than he has given. Therefore, he argues that a gain is due to him in addition to what he has lent, but any gain that exceeds the amount he has given is unlawful and usurious.
The perception of usury as an evil was not born with the Church. Aristotle gave a concise summary explanation why usury was despised in antiquity:
The most hated genre [of wealth-getting], and for the greater reason it is usury, which profits from money itself, and not from its natural object. For the money was intended to be used in exchange, but not to increase with interest. And this term interest, which means the birth of money from money, applies to the raising of money because the offspring resembles the parent. Why of [all] modes of obtaining wealth this is the most unnatural.
The medieval theologian Guillaume d’Auxerre Explain another angle on the immorality of usury: “The usurer acts contrary to natural law, for he sells time, which is common to all creatures. For William, because interest accrues over time, the loan shark is essentially selling time in order to acquire surplus money, even though the money is supposed to be sterile. Shakespeare commented on the sterility of silver in The merchant of Venicewhere he has a character to boast how his “gold and silver” can “breed as quickly” as “sheep and rams”.
The Church was to address the problem of usury systematically as commerce and trade increased at the beginning of the second millennium. Pietatis Mountains, or Mountains of Piety, were medieval financial institutions that provided interest-free loans to help the needy. The aforementioned Fifth Lateran Council forbade the practice of these institutions resorting to usury, only allowing the issuance of fees to cover the costs of maintaining the institutions (although many would still operate contrary to this decree):
[These] the credit organizations, established by the States and hitherto approved and confirmed by the authority of the apostolic see, do not introduce any kind of evil nor incite to sin if they receive, in addition to the capital, a modest sum for their expenses and by way of compensation, provided that it is intended exclusively to meet the expenses of persons employed and other things relating (as mentioned) to the maintenance of the organizations, and provided that no profit shall be fired. They should not, in fact, be condemned in any way. On the contrary, such type of loan is meritorious and should be praised and approved. This should certainly not be considered usurious.
Pope Francis has voiced support for ethical banking, citing in particular mounted:
May the Lord inspire and support public authorities, so that individuals and families can enjoy the benefits of the law as of any other economic reality; inspire and support the leaders of the banking system, so that they ensure the ethical quality of banking activities. It should be emphasized that many banks were born and spread throughout the world precisely to lift the poor out of usury with pledge-free and interest-free loans.
His predecessor, Pope Emeritus Benedict XVI, also mentioned mounted in his 2009 encyclical Caritas in truthsomething that most miss because of a bad choice of translation mount pietatis as a “pawnbroker”, as underline by Thomas Cigogne:
Both the regulation of the financial sector, in order to protect the weakest parties and discourage outrageous speculation, and the experimentation with new forms of financing, intended to support development projects, are positive experiences that should be explored. further and to encourage, emphasizing the responsibility of the investor. Moreover, the microfinance experience, which has its roots in the thought and activity of civil humanists — I am thinking in particular of the birth of the pawnbroker [de Montibus Pietatis constitutis] — should be strengthened and refined. This is all the more necessary in these times when financial difficulties can become serious for many of the most vulnerable sections of the population, who must be protected from the risk of usury and despair. We must help the weakest members of society to defend themselves against usury, just as we must help the poor to derive real benefit from micro-credit, in order to discourage possible exploitation in these two areas. Since rich countries are also experiencing new forms of poverty, microfinance can provide practical help by launching new initiatives and opening up new sectors for the benefit of the weakest sections of society, even in times of general economic downturn.
Modern Catholic teaching has not changed in its understanding of usury. The Ccompendium of the social doctrine of the Church the fact disengage“If the quest for fair profit is acceptable in economic and financial activity, recourse to usury is morally reprehensible. He also quotes Pope John Paul II, who speaks of usury as “a scourge which is also a reality in our time and which has a hold on the lives of many people”.
Pope Francis has speak bluntly on the deadly nature of usury:
Usury is a serious sin: it kills life, tramples the dignity of persons, promotes corruption and hinders the common good. It also weakens the social and economic foundations of a country. In fact, with so many poor people, so many families in debt, so many victims of serious crime, and so many corrupt people, no country can plan for a serious economic recovery or even feel safe.
It is very easy in our capitalist society to focus on ways to achieve financial stability. But the obsession with wealth is sentenced by Saint Paul: “For the love of money is a root of all kinds of evil, and in their desire to be rich, some have strayed from the faith and pierced themselves with much pain. We should also consider the wisdom in Proverbs: “The rich rules over the poor, and the borrower is the slave of the lender.”
Instead, we should focus on honest work and charity, for like Christ said, “Do good and lend without expecting anything in return. Your reward will be great and you will be children of the Most High.