Section 4. On the Prohibition of Usury

585. Usury, formally, is prohibited by natural law, divine law, and ecclesiastical law.¹

1. It is prohibited by natural law, because usury is repugnant to commutative justice: for to accept something beyond the principal is to accept more than that is worth which has been given, since mutuum by its nature is a gratuitous contract (n. 576); but this in exchanges is repugnant to commutative justice.

a. From these things it is gathered that usury received from mutuum is of itself always a sin against justice, whether the mutuum is furnished to the poor or to the rich, whether it is consumptive mutuum or productive: for its very nature demands that it be furnished gratuitously to the borrower. But if usury is required from the poor, one sins moreover against charity.

b. You will say: that cannot be prohibited by natural law which God once permitted to the Jews; but he permitted usury to them: You shall not lend to your brother at usury money or fruits or any other thing; but to an alien. But to your brother you shall lend without usury that which he needs.² Now some say that the permission conceded by God was licit for this reason, that God, the supreme owner of all things, transferred ownership in the interest received to the Jews; but others say it was licit for this reason, that there was a reason external to the mutuum for requiring interest, whether this was danger of the principal or ceasing profit because of opportunity for trade.

2. By divine law. The testimonies of Sacred Scripture by which usury is prohibited are many;³ but from these, especially if attention is given to the interpretation of the Church, we gather two things: first, that to accept usuries from divine revelation is a grave sin; and second, that the malice of this sin consists in this, that something more is required than was given by mutuum.

Although it cannot be affirmed that the encyclical of Benedict XIV Vix pervenit is a definition ex cathedra, both because it is directed to the bishops of Italy alone and because it does not appear that the doctrine set forth there is proposed by force of the primacy, nevertheless what the same pontiff teaches elsewhere must be held: "Every gain received from mutuum precisely by reason of the mutuum is illicit by every law, namely natural, divine, and ecclesiastical; this was and is the perpetual doctrine of the Catholic Church."⁴

3. By ecclesiastical law. There exist many and very severe laws of the Church prohibiting usury, the chief of which are these.⁵

The Council of Vienne (1311) decrees that he who pertinaciously presumes to affirm that practicing usuries is not a sin must be punished as a heretic.⁶

The Fifth Lateran Council (1515) condemned as the practice of usury "when someone from the use of a thing which does not germinate, with no labor, no expense, or no danger, strives to procure gain and interest."

Alexander VII condemned this proposition (42): "It is licit for the lender to require something above the principal if he obligates himself not to reclaim the principal until a certain time"; Innocent XI condemned this one (41): "Since counted money is more precious than money to be counted, and there is no one who does not value present money more than future money, the creditor can require something above the principal from the borrower and by that title be excused from usury." Cf. also the proposition 42 of Innocent XI.

There is added the most celebrated encyclical of Benedict XIV, Vix pervenit, directed to the bishops of Italy on Nov. 1, 1745, by which laws previously made are approved and confirmed. But the penalties laid upon public usurers are excommunication, infamy of law, and deprivation of ecclesiastical burial if they die impenitent.

Yet by these things the Church did not prohibit every interest, but usurious interest; but interest is usurious which is received from the lending itself and the use of money; but interest is not usurious which is received from another legitimate external title connected with the lending and use of money.⁷ Nor by these laws did the Church prevent gain from being taken from surplus money, provided the gain was just; for there were many modes of taking gain from money, not indeed by force of mutuum, but by other contracts added to mutuum, such as the purchase of rents, the contract of partnership, the triple contract, and the like.

¹ Until more recent times usury was also prohibited everywhere by civil law; but now laws forbidding usury have been abolished almost everywhere.

² Deut. 23:19-20.

³ Do not accept usuries from him, your brother, nor more than you gave. Fear your God, that your brother may live with you. You shall not give your money to him at usury, and you shall not require an abundance of fruits. Lev. 25:36-37. If he has not lent at usury and has not accepted more, he shall live life. Ezek. 18:8. Giving at usury and accepting more: shall he live? He shall not live, since he has done all these detestable things; he shall die death. Ibid. 18:13. Lehmkuhl I, n. 1096, and Vermeersch n. 358 collected other passages. Yet for demonstrating the gratuitousness of mutuum and the illicitness of interest, Luke 6:34-35 cannot be adduced: And if you lend to those from whom you hope to receive, what thanks is there for you? ... Lend, hoping nothing from it; because from the context of the discourse here there is no question of interest, but of the principal itself, which he who truly loves his neighbor, even if he is an enemy, must renounce: for he sometimes must give mutuum even in those circumstances in which he foresees that he is going to receive nothing.

⁴ De synodo, l. 10, c. 4, n. 2.

⁵ See other laws in Lehmkuhl I, n. 1098; Vermeersch n. 360.

⁶ C. Ex gravi un., De usuris (V, 5), Clem.

⁷ Cf. St. Thomas II-II, q. 78, a. 2, ad 1.

586. On the recent law of the Church. 1. Today the Church permits moderate interest to be required for pecuniary mutuum.

There exist several decrees of Roman congregations on this matter,¹ the first of which is that of the Holy Office, Aug. 18, 1830; from these decrees these things are gathered:

a. It is licit to receive interest from mutuum, even if another title making the gain honorable does not exist: for the words which occur in the decrees, "they are not to be disturbed," whether penitents who receive interest or confessors who absolve penitents of this kind, are equivalent to a positive permission.

b. The quantity of interest cannot be determined by a general rule, but the matter must be decided according to the common practice observed by men of fearful conscience in their respective places and times.²

2. The difference between the ancient and present-day law and practice of the Church is explained in diverse ways.

a. Haters of the Catholic Church accuse it as if in determining the nature of money it shamefully erred and from this error prohibited gain from mutuum, which was an impediment to the economic matter of the Middle Ages and to its progress, and brought enormous detriment to trade; they say now at last the Church, having unlearned its error, permits gain from mutuum. From what has been said it is already clear that these things are false and are reproached to the Church by injury.

b. Some theologians judge that the internal reason why the Church now permits interest which before it had prohibited must be taken from the disposition of civil law transferring ownership of interest to the lender.

But this explanation does not satisfy: for alpha. civil laws permitting gain from mutuum already existed at the time when the Church was still reproving interest; beta. in most kingdoms civil laws now permit unlimited gain, which laws indeed the Church cannot approve; gamma. the Church nowhere appeals to civil law as the cause making interest honorable, but permits it independently of civil law.

c. Others more truly explain it from the economic conditions of our time. Namely money, which is sterile of itself, can be made fruitful from external circumstances; but now the economic circumstances of our time bring it about that money must be called fruitful. Since these circumstances did not exist in former times, money then had to be called sterile.

¹ Cf. Bucceroni, Enchirid. morale^3 (Rome: Typographia iuvenum opificum, 1905), p. 113 ss.

² Sacred Penitentiary, Apr. 18, 1889.