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Old 15th November 2009, 03:13 PM
Ron Conte Ron Conte is offline
Join Date: Jan 2006
Posts: 12,591
Default usury: two types

Usury can be divided into two types, one of which is intrinsically evil, and the other of which is not intrinsically evil, but is immoral because of the circumstances.

First, when usury is excessive interest charged when goods or money are loaned, the morality of the act depends on the degree of interest, which is a circumstance. It is immoral to charge excessive interest on goods or money loaned, even if the amount of interest is legal. The moral law may require you to lend money without interest to a family member or to another person, as an act of charity, in certain circumstances. But charging interest is not intrinsically evil, for Sacred Scripture permits lending at interest.

{23:19} You shall not lend money, or grain, or anything else at all, to your brother at interest,
{23:20} but only to a foreigner. For you shall lend to your brother whatever he needs without interest, so that the Lord your God may bless you in all your works in the land, which you shall enter so as to possess it.

The Israelites were not permitted to charge interest on money or goods lent to their fellow Israelites. The act of lending, in such a case, is an act of charity, or a type of almsgiving; the eternal moral law requires acts of charity and almsgiving. However, the Israelites were permitted to charge interest on money or goods lent to foreigners (i.e. to non-Jews). Sacred Scripture specifically permits this type of interest; therefore, charging interest cannot be intrinsically evil. Thus, usury does not refer to any type of interest charged against what is loaned, but to excessive interest.

Charging interest is moral because the person loaning the money or goods lacks the use of these until they are returned, and the money or goods may decrease in value (due to inflation, or wear and tear), and the lender assumes a degree of risk in making the loan. Therefore, it is just to compensate the lender (or creditor) for the time period of the use, for any loss in value of what is borrowed, and for the assumed risk. When the interest charged is excessive, then the act is immoral, but only because of degree (which is in the circumstances). Intrinsically evil acts are not moral in one degree and immoral in another degree. And so usury by excessive interest is immoral, but not intrinsically evil. A reduction in the degree of interest would make the very same act moral.

Second, when usury is a type of theft, then the act is intrinsically evil and always immoral, regardless of intention or circumstances. In this case, the lender (or creditor) requires both a payment for the goods, in an amount which meets or exceeds the value of the goods, and also the return of the goods. For example, a wealthy merchant would give a measure of wheat in exchange for a fee, and also require the return of the same amount of wheat at a later time (after the harvest). Since the price for the wheat was sufficient for its purchase, the wheat has been sold, and its ownership has been transferred to the buyer. The additional requirement to return the same amount of wheat constitutes a type of theft. In the past times, in some places, some secular laws supported this type of usury. But even when it is entirely legal, this type of usury is an act of theft, and is intrinsically evil and always immoral.
Ron Conte
Roman Catholic theologian
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