Usury

Exodus, 22:24 )

And if thy brother be waxen poor, and his means fail with thee; then thou shalt uphold him: as a stranger and a settler shall he live with thee. Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon interest, nor give him thy victuals for increase. (Leviticus, 25:35-37)

Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest. Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it. (Deuteronomy, 23:20-21)

New Testament

There are two parables in the New TestamentNew Testament

The New Testament , sometimes called the Greek Testament or Greek Scriptures, and sometimes also New Covenant...
 that refer to concepts of "usury" or "interest" both approving of the concept in principle.

"Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?" -

"Finally the master said to him "Why then didn't you put my money on deposit, so that when I came back, I could have collected it with interest?'" -

Luke VI 32-35 calls for giving in hope of no return, but this refers to personal altruism, not prudent banking, business and economic practices, which are commanded and affirmed by Jesus in mentioned above.

Qur'an

The following quotations are from the Qur'anQur'an

The Qur'an , is the central religious text of Islam....
:

Those who charge usury are in the same position as those controlled by the devil's influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God. As for those who persist in usury, they incur Hell, wherein they abide forever (Al-Baqarah 2:275)

God condemns usury, and blesses charities.God dislikes every disbeliever, guilty. Lo! those who believe and do good works and establish worship and pay the poor-due, their reward is with their Lord and there shall no fear come upon them neither shall they grieve. O you who believe, you shall observe God and refrain from all kinds of usury, if you are believers. If you do not, then expect a war from God and His messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew. (Al-Baqarah 2:276-280)

O you who believe, you shall not take usury, compounded over and over. Observe God, that you may succeed. (Al-'Imran 3:130)

And for practicing usury, which was forbidden, and for consuming the people's money illicitly. We have prepared for the disbelievers among them painful retribution. (Al-Nisa 4:161)

The usury that is practiced to increase some people's wealth, does not gain anything at God. But if people give to charity, seeking God's pleasure, these are the ones who receive their reward many fold. (Ar-Rum 30:39)

Scholastic Theology

The first of the scholastics, Saint Anselm of Canterbury, led the shift in thought that labeled charging interest the same as theft. Previously usury was seen as a lack of charity.

St. Thomas AquinasThomas Aquinas

Saint Thomas Aquinas [Thomas of Aquin, or Aquino] was an Italian philosopher and theologian in the scholastic t...
, the leading theologian of the CatholicCatholic

Catholic - derived, through Latin, from the Greek adjective , meaning "general", "universal" - when used as a specifical...
 Church, argued charging of interest is wrong because it amounts to "double charging", charging for both the thing and the use of the thing. Aquinas said this would be morally wrong in the same way as if one sold a bottle of wine, charged for the bottle of wine, and then charged for the person using the wine to actually drink it. Similarly, one cannot charge for a piece of cake and for the eating of the piece of cake. Yet this, said Aquinas, is what usury does. Money is exchange-medium. It is used up when it is spent. To charge for the money and for its use (by spending) is to charge for the money twice. It is also to sell time since the usurer charges, in effect, for the time that the money is in the hands of the borrower. Time, however, is not a commodity that anyone can sell. (For a detailed discussion of Aquinas and usury, go to Thought of Thomas AquinasThought of Thomas Aquinas Summary

This article contains selected thoughts of Thomas Aquinas on various topics....
).

This did not, as some think, prevent investment. What it stipulated was that in order for the investor to share in the profit he must share the risk. In short he must be a joint-venturer. Simply to invest the money and expect it to be returned regardless of the success of the venture was to make money simply by having money and not by taking any risk or by doing any work or by any effort or sacrifice at all. This is usury. St Thomas quotes Aristotle as saying that "to live by usury is exceedingly unnatural". Islam likewise condemns usury. Judaism absolutely condemns it, whether to the alien in [their] midst" or "[their] brother (fellow Jews)". St Thomas allows, however, charges for actual services provided. Thus a banker or credit-lender could charge for such actual work or effort as he did carry out e.g. any fair administrative charges. The Catholic Church, in a decree of the Fifth Council of the LateranFifth Council of the Lateran

When elected pope, Julius II promised under oath that he would soon convoke a general council....
, expressly allowed such charges in respect of credit-unions run for the benefit of the poor known as "montes pietatis".

In the 13th century Cardinal HostiensisHenry of Segusio

Henry of Segusio, usually called Hostiensis, was an Italian canonist of the thirteenth century, born at Susa, in the a...
 enumerated thirteen situations in which charging interest was not immoral. The most important of these was lucrum cessans (profits given up) which allowed for the lender to charge interest "to compensate him for profit foregone in investing the money himself." This idea is very similar to Opportunity CostOpportunity cost

In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone , or...
. Many scholastic thinkers who argued for a ban on interest charges also argued for the legitimacy of lucrum cessans profits (e.g. Pierre Jean Olivi and St. Bernardino of Siena).

=Other Contexts=

Usury in literature

In The Divine ComedyThe Divine Comedy

The Divine Comedy , written by Dante Alighieri between 1308 and his death in 1321, is widely considered the central epic...
DanteDante Alighieri

Durante degli Alighieri, better known as Dante Alighieri or simply Dante, was an Italian Florentine poet....
 places the usurers in the inner ring of the seventh circle of hell, below even suicides. (Showing how cultural attitudes have changed since the 14th century, the usurers' ring was shared only by the blasphemersBlasphemy

Blasphemy is the defamation of the name of a God....
 and sodomitesSodomy

Sodomy is a term of biblical origin used to characterize certain sexual acts that were attributed to citizens of ancient Sod...
.)

In the 16th century it was necessary for ShylockShylock

Shylock is a central character in Shakespeare's The Merchant of Venice who famously demanded a "pound of flesh" from the...
 to convert to Christianity and forsake usury before he could be redeemed in the climax of The Merchant of VeniceThe Merchant of Venice Overview

The Merchant of Venice is one of William Shakespeare's best-known plays, written at an uncertain date between 1594 and 1...
. Thomas LodgeThomas Lodge

Thomas Lodge was an English dramatist and writer of the Elizabethan and Jacobean periods. ...
's didactic tirade against London moneylenderMoneylender

A moneylender offers small personal loans at high rates of interest, usually higher rates than the market rate charged on cr...
s, An Alarum against Usurers containing tried experiences against worldly abuses tried to incite the educated class against the harm usurers seemed to induce in their victims.

By the 18th century usury was more often treated as a metaphor than a crime in itself, so that Jeremy BenthamJeremy Bentham

Jeremy Bentham was an English jurist, philosopher, and legal and social reformer....
's Defense of Usury was not as shocking as it would have appeared two centuries earlier.

In the early 20th century Ezra PoundEzra Pound

Ezra Weston Loomis Pound was an American expatriate, poet, musician, and critic who, along with T....
's anti-usury poetryThe Cantos

The Cantos by Ezra Pound is a long, incomplete poem in 120 sections, each of which is a canto....
 was not primarily based on the moral injusticeNatural law

Natural law is law that exists independently of the positive law of a given political order, society or nation-state....
 of interest but on the fact that excess capital was no longer devoted to artistic patronagePatronage

Generally, patronage is the act of a so-called patron who supports or favors some individual, family, group or institution....
, as it could now be used for capitalistCapitalism

Capitalism is an economic system in which the means of production are owned mostly privately, and capital is invested in t...
 business investment..

Usury and the law

"When money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use, the increase is called interest by those who think it lawful, and usury by those who do not." (Blackstone's Commentaries on the Laws of England, p. 1336).

In the United States, usury laws are state laws that specify the maximum legal interest rate at which loans can be made. Congress has opted not to regulate interest rates on purely private transactions, although it arguably has the power to do so under the interstate commerce clauseCommerce Clause Summary

Article I, Section 8, Clause 3 of the United States Constitution, known as the Commerce Clause, empowers the United St...
 of Article I of the Constitution.

Congress has opted to put a federal criminal limit on interest rates by the RICO definitions of "unlawful debt" which make it a federal felony to lend money at an interest rate more than two times the local state usury rate and then try to collect that "unlawful debt".

It is a federal offense to use violence or threats to collect usurious interest (or any other sort). Such activity is referred to as loan sharkLoan shark

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