Sunday, July 7, 2013

1) Usury: Understandings of Just Lending

The Church’s constant condemnation of usury, which has its origins in the teaching of Jesus Christ, excellently exemplifies the nature of Catholic social teaching as contrasted with dogmatic teachings. In the interest of social justice, the Church must always respond to social realities. While the essence and energies of God are constant, human social and economic situations, which include the Church but also everyone else, are in constant flux. While the Church must constantly seek justice and condemn injustice, particularly and preferentially on behalf of the poor, the concrete shape and features of that justice necessarily change in response to new situations. While the Church constantly condemns usury, the definition of usury has necessarily undergone change. Concern for economic justice, however, is changeless.

Usury originally meant the loaning of money with any interest and the early Christian tradition originally regarded this as always a grave sin. Usury has taken many forms and many of these are extant realities. Nowadays, loans with interest are the very stuff of American economic life. Most Americans are in debt – often debt so enormous that, each month, they are able to pay off only the interest – and many accept this as a quotidian fact. The forms and quantities of loans, the types of creditors and debtors, and the rates of interest all vary widely in the present economic milieu – from credit cards to student loans, from mortgages to savings accounts. Usury affects everyone, but most of the upper and middle class in this society do not seem to mind. This is because it does not generally deprive them of the necessities or even the comforts of life. Unfortunately, “at the moment, millions across the globe suffer at the hands of others who would happily keep them in poverty through excessive and crushing interest rates.”[1] The term “usury” has come to mean, not just loaning with interest, but rather, loaning with exorbitant interest. Undeniably, some interest rates are usurious, as is clear from the ruinous and binding effect they have on the lives of many poor.
"Currently the worst manifestation of unjust lending in the United States is the ‘payday’ loan, which is specifically designed to keep people in debt; with interest rates up to 400 percent, these companies amass profits in the amount of approximately $4.2 billion annually, intentionally creating financially desperate circumstances for individuals and their families."[2]
Yet other kinds of interest, such as that gained in savings accounts, seem to do no one any harm. Nonetheless, according to scripture and the tradition of the early Church, any interest rate is usurious. Furthermore, not only were the lives and well-being of the poor at stake, so also was the salvation of the lenders because usury was considered a grievous sin. 


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