What were Catholic teachings on usury?

Answer 1

A:

St. Ambrose defined usury as "whatever is added to capital." The practice of earning interest from loans and investments was condemned from by various councils, from the Council of Nicaea onwards, and represented one of the most grievous sins of early Christian tradition. Jacques LeGoff (Your Money or Your Life) believes that purgatory was created in the Middle Ages in order to have an afterlife punishment for usury, short of eternal damnation in hell.

From the Late Middle Ages and more so in the early modern era, the Catholic Church looked for ways to soften its stance on usury, without changing long-held and apparently infallible and unchanging doctrines.

An important change came when Pope Pius XI signed the Concordat with Mussolini. The Vatican went from near-bankrupcy to being an enormously wealthy organisation, and now needed to use the funds at the disposal of the pope. Pope Pius employed a gifted financial advisor who soon taught the Vatican how to pursue the highest returns on its funds, through interest and investments, some of which were quite contrary to Catholic teaching. In 1950, Pope Pius XII rhetorically asked, "Does not the social function of the bank consist in making it possible for the individual to render his money fruitful, even if only in a small degree, instead of dissipating it, or leaving it sleep without any profit, either to himself or to others." What had once been regarded as usury and sinful no longer is. Usury still exists, but is redefined to apply where exorbitant interest is charged.

Catholic AnswerUsury is the taking of excessive interest on a loan. It was, and always has been a capital sin. Usury in its strictest sense is contrary to divine positive law, to Ecclesiastical law, and to Natural law. Divine Law commands: "Lend to them (your enemies) without any hope of return" (Lk vi, 35; cf. Ex xxii, 25; Lev xxf, 35-37; Ez xviii, 8, 13). Ecclesiastical law has severely forbidden usury in five Ecumenical Councils (Lateran III, IV, V; Lyons II; Vienna) and in several condemned propositions. Natural law forbids selling the same thing twice. But in fungible goods which are also consumed at their first use, the goods themselves and their use are morally the same--that is to say, they do not possess separate prices. Therefore a person who demands a price both for the thing he loans and for its use is selling the same thing twice and thus offends against Natural law. Accordingly St. Leo the Great well says: "Foenus pecuniae funus est animae."

Interest, although the word itself does not differ in meaning from usury, is usually understood to refer to profit lawfully acquired for legitimate reasons from a loan for consumption. The reasons that interest may be lawful: actual damage, loss of profit, risk to the object loaned, and danger from delay in returning what was lent.

- extracted from Handbook of Moral Theology, Fr. Dominc M. Prummer, O.P. and

Modern Catholic Dictionary by Fr. John A. Hardon, S. J.