For centuries the Church spoke with strength against usury. Then society changed so much that the message could no longer be heard.
The transition from abhorrence to acceptance is best demonstrated by a letter of St. Francis Xavier, the famous 16th-century Catholic missionary and co-founder of the Jesuits, writing to a priest.
When in the sacred tribunal of penance you have heard all that your penitents have prepared themselves to confess of their sins, do not at once think that all is done and that you have no further duty to discharge. You must go on further to inquire, and by means of questions to rake out the faults which ought to be known and to be rendered, but which escape the penitents themselves on account of their ignorance.
Ask them what profits they make? How and when? What is the system that they follow in barter and in loans; and in the whole matter of security for contracts?
You will generally find that everything is defiled with usurious contracts; those very person have got together the greater part of their money by sheer rapine, who nevertheless asserted themselves so confidently to be pure from all contagion of unjust gain; having, as they said the true testimony of a conscience that reprehends them in nothing. Indeed some persons’ consciences have become so hardened that they have either no sense at all, or very little sense, of the presence of even vast heaps of robberies which they have gathered into their bosom.1
By the 16th century usury had become the unknown sin, a manner of stealing money from others which its practitioners did not even acknowledge as theft.
But it had not always been this way.
The Early Foundation
Last week I detailed how the Hebrew scriptures spoke against usury. Jewish thinkers in Jesus’s time believed loans at interest were an evil enterprise and the Talmud went into detail to prevent people from getting around the prohibition. The New Testament does nothing to temper this Old Testament witness and may even extend it.2
The Church fathers uniformly condemned usury. Clement of Alexandria, Athanasius, Apollonius, Basil the Great, Cyril of Jerusalem, John Chrysostom, Epiphanius, Theodoret, Lactantius, Cassiodorus, Augustine, and Jerome were among many who denounced the practice. Tertullian, the father of Western theology, states that the Gospel spirit prohibits interest to an even greater degree than the Old Testament.3 Gregory of Nyssa equated usury with robbery,4 as did Ambrose when he declared it a mortal sin that leads to damnation.5
“Let them therefore hear what the law says: You shall not, it says, receive the usury of food, nor of anything else – the victuals is usury, the cloth is usury, and whatever is added to the principal is usury; whatever name you give it, it is usury.”6
What was so wrong with usury? The Church fathers argued that it was unloving. People who were willing to pay interest in order to get a loan were in need of money, how could a Christian with money wish to profit off their need? In Ambrose’s argument, Christians were called to extend the prohibition on exploiting fellow Israelites to all persons.
“It is a mark of kindly feeling to help him who has nothing, but it is a sign of hard nature to extort more than one has given. If a man has need of assistance because he has not enough of his own to repay a debt, is it not a wicked thing to demand under the guise of a kindly feeling a larger sum from him who has not the means to pay off a less amount? You do nothing but but free him from debt to another to bring him under your own hand, and you call that human kindliness which is but a further wickedness.”7
The 4th-century bishop St. Hilary of Poitiers appealed to his congregants to choose brotherly love over greed:
“If you are a Christian, why do you scheme to have your idle money bear a return and make the need of your brother, for whom Christ died, the sources of your enrichment?”8
The Fathers also argued that usury violated natural law. Money was not like seeds or lambs, it did not reproduce. To demand back more than you had been given was to create a fallacy where money could indefinitely increase to fulfill increasingly larger obligations. Secular philosophers like Aristotle had made the same argument in their own denunciations of the practice.
The Church councils were also uniform in denouncing loans at interest. Condemnations of usury are found in the Synod of Elvira, the Council of Arles, the First Council of Nicea, the First Council of Carthage, the declarations of Leo the Great, the Council of Aix, the Second Lateran Council, and many other summaries of church doctrine.
In the words of one researcher, “Every Church Father and every ecclesiastical council that addressed the topic of usury before the 16th century condemned the practice.”9
The Medieval Church
The denunciations continued through the Middle Ages. Pope Gregory IX, Pope Urban III, Pope Innocent III, Gratian (the “Father of Canon Law”), and the legendary theologian Thomas Aquinas proclaimed that usury was reprehensible.
“It is naturally illegal to receive any price for the use of money, which is called usury; and as man is bound to restore any other ill-gotten property, he is liable to restore any money he might have receive by the practice of usury.”10
“The man is to be considered an usurer who lends a certain sum of money to a man going to sea, or to market, on condition of receiving something more than the principal”11
In 1150 Gratian’s systematization of canon law forbid “whatsoever is taken for a loan beyond the principal.”12 Two decades later the Third Lateran Council summoned by Pope Alexander III cited both the Old and New Testament in declaring that usurers were to be punished with excommunication.13 In 1311 the Council of Vienne summoned by Pope Clement V declared that anyone who even argued that demanding interest wasn’t sinful should be punished as a heretic.14
Anyone who argued that interest wasn’t sinful was a heretic.
As with other forbidden vices – alcohol, sex, etc. – plenty of people still wanted quick money. Barred from profiting off of interest, Christians were loath to become moneylenders. Jews were also prohibited by their Scriptures from loaning to other Jews…but they could still lend to non-Jews.
And thus began a devastating bargain. Those princes who wanted financial industry in their territory, but didn’t wish to draw the ire of the Pope, began encouraging groups of Jews to set up in town and work as moneylenders. As the Jews were discriminated against in other professions, usury became their characteristic field. Usurers are famously hated, and thus propagated the stereotype of Jewish moneylenders as evil, deceptive, and greedy. The already-existing animosity towards Jewish people reached an unprecedented level. By 1215 the Fourth Lateran Council condemned Jews who charged excessive interest,15 in 1275 Edward I of England passed an anti-Jewish statute that among other things made charging interest illegal for all persons,16 and in 1290 Edward expelled the Jews from England in an edict that held until the middle of the 17th century.17
Arguments against Jewish usury were sometimes made from a more loving position. The 15th-century theologian Alessandro Nievo wrote a consilia decrying the practice of Jewish moneylending because the Church had a responsibility for Jewish souls.18 If usury was truly a mortal sin, then how could Christians enable others to partake of it just to keep their own hands clean? In addition, loans at interest made the borrower a slave to the debtor…so how could one condone Christians becoming enslaved to Jews?
Nievo’s plea did not win the day, and so outside of England Jewish moneylenders continued to be sanctioned. In some places there were civil limits on interest levels, in others there were not, but reality was that the moneylenders operated from a position of power and tended to charge high rates whether it was legal or not.
The Church tried to find other ways to loan money. In several regions no-interest lending institutions were founded, though they would close down when their endowment ran out. In the 14th and 15th centuries many bishops founded non-profit montes pietatis that would take a valuable object as surety against a low-interest loan. The institutions were controversial among theologians who thought that charging any interest at all was a violation of Scripture. To settle the dispute, the Fifth Lateran Council of 1515 declared the montes pietatis to be meritorious (while admitting that many church figures still held the opposite opinion),19 and they spread throughout Europe.
Despite their lower interest rates, the montes pietatis were targeted with some of the same hatred as the Jewish moneylenders. Their supporters argued that low-interest loans were at least better than the high-interest alternative. They are credited with having helped to launch an atmosphere of growing acceptance for usury, even though even these institutions were “often the cause of financial ruin.”20
The Protestant Reformation came at the time when usury was beginning to find acceptance. Though the climate for modern capitalism was budding, most of the original Reformers looked to the Bible and saw a strong denunciation of usury, and therefore argued that the Church’s acquiescence was a demonstration of its corruption.
Martin Luther, who some commentators describe as anti-capitalism in general, spoke out against usury repeatedly. His 1519 sermon “A Treatise on Usury” contrasts the desire to take usury with Christian charity.
“To serve God means to keep his commands and not steal, take, charge interest, and the like, but rather to live and lend to the needy.”21
Luther’s later sermon “On Trading and Usury”22 makes clear that he regards usury as any charge on a loan and finds it to be unloving, greedy, and lazy.
“I know very well that very many doctors have interpreted these words as though Christ had commanded to lend in such a way as not to make any charge for it or seek any profit by it, but to lend gratis. This opinion is, indeed, not wrong, for he who makes a charge for lending is not lending and neither is he selling; it must therefore be usury, because lending is, in its very nature, nothing else than to offer another something without charge, on the condition that one get back, after awhile, the same thing, or its equivalent, and nothing more.”
“Now, borrowing would be a fine thing if it were done between Christians, and the lender would gladly go without if the borrower was unable to repay. For Christians are brothers, and one does not desert another; nor is any one so lazy and shameless as to wish to depend without work on the goods and work of another, and live in idleness on the property of another.”
This sermon, just a few years after the Fifth Lateran Council, also notes how usury had gained acceptance in certain forms.
“First. It should be known that in our times (of which the Apostle Paul prophesied that they would be perilous) avarice and usury have not only taken a mighty hold in all the world, but have undertaken to seek certain cloaks under which they would be considered right and could thus practice their wickedness freely, and things have gone almost so far that we hold the holy Gospel as of no value. “
“But then they say, ‘The churches and the clergy do this and have done it, because this money is used for the service of God.’ Truly if a man has nothing else to do than to justify usury, a worse thing could not be said about him, for he would take the innocent church and the clergy with him to the devil and lead them into sin. Leave the name of the Church out of it, and say, ‘It is usury-seeking avarice that does not like to work to earn its bread, and so makes the name of the Church a cloak for idleness.’”
Luther concludes by suggesting that if profit is necessary, then the principle of tithing may offer the best alternative for Christian loans. In this system money is loaned with the agreement that the borrower will pay back the principal along with at least 10% of any profits he earns. Thus if the business goes well they all profit together, and if the business goes poorly they all take the loss together, but under no circumstance would the lender profit off the borrower’s loss.
Melanchthon, the first Lutheran systematic theologian, also condemned all interest as theft and helped cement the general Lutheran position as anti-usury. The Swiss Reformation leader Zwingli agreed, and the Anglican king Edward VI established it as the position in England as well. The most prominent 16th-century English Puritans, such as Henry Smith, decried usury in their preaching.23 And the Anabaptists, as would be expected, were uniform in their denunciations of loans at interest.24
In some cases they were willing to put their money where their mouths were. Under Luther’s support the Wittenberg Church Order of 1522 provided interest-free loans and support for the poor, and some of these charities were copied across the Protestant world.
Prohibitions on Usury Relaxed
The demand for money was greater than what charity would provide. In the face of pressure from the merchant community and the damaging effects of a black market, some Christians began to chart a middle road. The German Catholic theologian Johann Eck, supported by the Fugger banking family, argued that interest was only illicit when the lender intended to oppress the borrower and suggested that 5% should be an allowable rate.25 On the Protestant side, the 16th-century reformer Martin Bucer was the first to claim that neh’-shek referred only to “excessive interest” (though even Bucer argued that charging interest to the poor was abusive).26
Some credit John Calvin with doing the most to legitimize usury in Reformation-driven Europe. Calvin’s position is most clearly laid out in a letter to a banker friend, now entitled De Usuris Responsum.27
Calvin determines that the Biblical injunction against interest was a cultural issue, and states that interest in itself is not evil. He admits that if he could remove usury from the Earth, he would, and declares that usurers are virtually never honest men. With usury comes deception and cruelty, and thus no one should make usury their occupation. But feeling that he must live in a world where loans at interest do exist, he allows for them while dictating a set of constraints for their use:
- Never charge interest to the poor or to anyone in a desperate situation
- Never let your desire for interest cause you to neglect your duty to give generously to the poor
- Never give a loan under terms that you wouldn’t want to take yourself
- No loan with interest should be given unless the borrower is expected to profit at least 100% over and above the principal of the loan
- The amount of interest charged should not be based on market rates, but rather what is fair and just in accordance with the needs of the borrower
- Loans should only be given to those who will use them for the public good and not for damaging enterprises
Those constraints are remarkable. Remember that in the 16th century this is seen as a compromise at best and heresy at worst. But even as a compromise, Calvin’s Christian principles have so heavily constrained the practice of loans-at-interest that it is hard to imagine the modern loan industry surviving the process.
Still, it was a big leap to go from saying, “all interest is evil” to “interest is sometimes okay”. Now the floodgates were open. The Heidelberg Catechism of 1563 only decried “exorbitant interest”. In 1571 Queen Elizabeth made charging interest once again legal in England, though the rates were capped at 10%. Most other Protestant countries soon followed.
Not everyone agreed. In 17th-century England the Anglican priests Roger Fenton (a translator of the King James Bible) and John Blaxton spoke out with force against interest, defining it as any addition to the principal and citing numerous bishops and archbishops in support of their position.28 The Anabaptists also continued their opposition to the cultural movement, as did some Puritans. But for the most part the Protestant debate had shifted to which rates were allowable. When America was settled most of the colonies passed anti-usury laws which only limited the rates moneylenders could demand. By the 19th century these laws were eased or repealed altogether, and a laissez-faire approach to lending was in full effect.
Though in practice many Catholics were partaking of loans at interest and even the Church was involved through the montes pietatis, it took longer for official Catholic doctrine to catch up to the Protestant position. When the famous philosopher Scipio Maffei wrote a Calvin-like justification of usury in 1744, he was rebuked by his friend Pope Benedict XIV, who responded with the treatise Vix Pervenit on Usury and Other Dishonest Profits, condemning all usury in no uncertain terms.
“One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions.”29
Pope Gregory XVI officially applied Vix Pervenit to the whole of the Catholic Church in 1836, but by then it was too late and momentum had moved towards the legality. In 1917, the Catholic church’s canon law officially allowed even church funds to be invested at “legal” rates of interest.30
What does this mean for today?
One could summarize the church’s position on usury by saying, “it was banned until the 16th century, controversial for a few centuries, and ignored now.”
There are many defenses for why interest is so casually accepted today. Some excuses are better than others. The idea that usury in the Bible only refers to “excessive interest” is certainly false. The idea that Biblical authors and early Church fathers didn’t understand economics and therefore we can write new rules that supplant theirs seems like a tough sell. The argument that in our fallen world usury is bad but low interest rates are better than high ones, and charitable loans wouldn’t otherwise be sufficient….that’s the argument that has been the most convincing historically, to thinkers like Calvin and the supporters of the montes pietatis. Whether it is right is up for debate.
But most of all I want to argue that there should be such a debate. When the Biblical record against loans at interest is so strong, and the church history is so strong, who are we to defy all of that just because of the cultural expectation that profiting off of interest is okay?
It should give us pause to note that across all periods of history, in virtually all cultures, moneylenders who charge interest have come to be despised. It mattered not whether they were 13th-century European Jews or 16th-century montes pietatis. In the “new situation” of the 21st-century, we have credit card companies and used car salesmen and payday loans and mortgage brokers and student loan outfits, ALL of which look like the “bad guy” to a substantial portion of the population, all of which have been credited with a great deal of economic dysfunction. Strange that we claim to be in a new situation and yet the lives destroyed and animosity built is so familiar.
It is hard to claim to love our neighbor as ourselves and yet charge rates than we ourselves would never accept. Or to insist that we don’t chase after riches while profiting off of loans to the poor. Or choose to make a nice living (or substantial retirement account) investing our excess mammon at high interest rates rather than donating it. I fall somewhere between the absolute ban on interest and Calvin’s looser standard….but today even Calvin’s looser standard is so heavily tied to Biblical values that it would be unrecognizable to Christian businessmen.
In light of the Biblical and historical witness, what loans do you think should survive? In what cases do you believe that charging interest on a loan would be the most righteous use of that money?
 Francis Xavier, “Letter to Father Gaspar Baertz, who is going to Ormuz, March 1549”, printed in Life and Letters of St. Francis Xavier, ed. Henry James Coleridge, S.J., 1872, Vol. II, pp 118-119.
 Luke 6:46, Matthew 5:42
 Tertullian, “Adversus Marcionem” 4.17, quoted in Robert P. Maloney, “The Teaching of the Fathers on Usury: A Historical Study on the Development of Christian Thinking”, Vigiliae Christianae Vol 27, No 4, pages 241-265
 Gregory of Nyssa, “Homily IV in Ecclesiastes” and “Epistle ad Letoium”, quoted in Maloney
 Ambrose, “De bono mortis” 12.5 and “De Tobia” 88, in Maloney
 Ambrose, “De Tobia” C. 14, quoted in Jeremiah O’Callaghan, Usury: Funds and Banking, Monopoly, Forestalling, Traffick, Gallican Liberties. Graves, Anatomy. New York, 1856.
 Ambrose, “Duties of the Clergy”, Chapter III: 20, in O’Callaghan
 Hilary of Poitiers, “Tractatus in Psalm XIV (15)”, in Maloney
 Murray Lee Eiland, “The Historical Problem of Usury”, a M.Div. thesis at the Catholic University Leuven, Faculty of Canon Law, 2012.
 Thomas Aquinas, Summa Theologica, Second Part of the Second Part, Q78, Article 1.
 Decretals of Gregory IX, Lib. 5, Tit. 19, Cap. 19, in O’Callaghan
 “Ecce evidenter ostenditur, quod quicquid ultra sortem exigitur usura est” from the Decretum Gratiani, quoted in R. H. Helmolz, “Usury and the Medieval Church,” Speculum 61, no. 2 (1986): 365.
 Third Lateran Council, 1179, Canon 25, http://www.papalencyclicals.net/councils/ecum11.htm
 Council of Vienne, 1311, Decree 29, https://www.ewtn.com/library/COUNCILS/VIENNE.HTM
 Fourth Lateran Council, 1215, Constitution 67, http://www.papalencyclicals.net/councils/ecum12-2.htm
 Edward I of England, Statute of the Jewry, https://en.wikipedia.org/wiki/Statute_of_the_Jewry
 Edward I of England, Edict of Expulsion, https://en.wikipedia.org/wiki/Edict_of_Expulsion
 Alessandro Nievo, Consilia contra Judaeos fenerantes. Nuremberg, Friedrich Creussner, 1479. https://blogs.loc.gov/law/2016/05/the-consilia-of-alessandro-nievo-on-jews-and-usury-in-15th-century-italy/
 Fifth Lateran Council, Session 10, 1515, http://www.papalencyclicals.net/councils/ecum18.htm
 U. B “Montes Pietatis.” In The Catholic Encyclopedia. New York: Robert Appleton Company, 1911. http://www.newadvent.org/cathen/10534d.htm
 Martin Luther, “A Treatise on Usury”, quoted in Mark U. Edwards, Jr., Printing, Propaganda, and Martin Luther, UC Press Berkeley, 1994.
 Martin Luther, “On Trading and Usury”, quoted in Works of Martin Luther, vol. 4, A.J. Holman Company, 1915.
 Andrew Dickson White, A History of the Warfare of Science with Theology in Christendom, “Chapter XIX: From Leviticus to Political Economy, Origin and Progress of Hostility to Loans at Interest.” Appleton & Company, 1896.
 David Wayne Jones, Reforming the Morality of Usury, University Press of America, 2003.
 Michael Hoffman, Usury in Christendom: The Mortal Sin that Was and Now is Not, Independent History and Research, 2012.
 Andrew Dickson White, A History of the Warfare of Science with Theology in Christendom, “Chapter XX: From Leviticus to Political Economy, Retreat of the Church, Protestant and Catholic.” Appleton & Company, 1896.
 John Calvin, “Letter of Calvin: De Usuris Responsum”, printed in Calvin Elliott, Usury: A Scriptural, Ethical, and Economic View, The Anti-Usury League of Millersburg, Ohio. 1902.
 “Usury”, Economic History Association, https://eh.net/encyclopedia/usury/
 Pope Benedict XIV, “Vix Pervenit On Usury and Other Dishonest Profits”, 1745, http://www.papalencyclicals.net/ben14/b14vixpe.html
 T.L. Bouscaren and A.C. Ellis. 1957. Canon Law: A Text and Commentary. Bruce Publishing Company, 1957, p. 825.