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He didn't. He held to the Catholic teaching in this matter. But he did change it. Instead of the Catholic teaching that it consisted of three parts (Contrition, Confession/Absolution, and Satisfaction), he stated that it truly has only 2 parts (Contrition and Faith). Penance (Confession) is one of the three sacraments that Martin Luther acknowledged, along with Baptism and Holy Communion, in his new Church.

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Q: Why did Martin Luther eliminate the sacrament of Penance?
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