What does the Church mean by usury?
Is all interest wrong? Only high interest? Jerod Frank shares how he studied the question and the single idea that organized his thinking.
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About 37 minutes with host Ben Martinek on Catholic Money Mastermind. Press play, or jump to the topic that interests you most.
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Ask 100 Catholics, get 100 answers
After entering the Church, Jerod was challenged by a Catholic he respects: isn't any interest usury? That question sent him deep into the sources, and he found people tend to land in one of two camps.
One camp says usury means high interest, such as payday loans and credit cards. The other, often more traditional, says any interest at all is usurious. Jerod's study led him to a more precise answer than either.
EPISODE · 6:17 – 8:01Usury is about a particular kind of loan
Jerod points to Vix Pervenit and to St. Thomas Aquinas. In his summary, usury is interest charged on a mutuum, a Roman-law term for a loan of something that is consumed in its use.
Aquinas’s example is wine. Lend someone wine and they drink it. Charging for the wine and separately for its use is, in Aquinas’s words as Jerod relays them, selling something that does not exist.
In practice, Jerod explains, this comes down to a personal guarantee: the borrower must repay what was lent plus interest, no matter what.
EPISODE · 8:01 – 9:21Not “how high is the rate?” But “can it end?”
Jerod’s test is the exit. A loan that can follow someone for life, however small the rate, is the concern. A loan with a defined way out is a different thing. He compares that way out to a jubilee: a reset where no one stays indebted forever.
The rate itself, he adds, is relative. What counts as high in one era is low in another. So the rate alone is not an objective measure of right or wrong.
The idea, applied to a few simple cases
Does it raise the usury concern?
A teaching tool based on the framework as Jerod described it in the episode. It is an illustration of one speaker’s summary, not a ruling, and it is not advice about any real loan or investment.
Note: Jerod also observed that a lender can be abusive or deceptive without the loan being usury in the technical sense.
Three ideas worth remembering
Usury is committed against people
Jerod notes that usury concerns a person on the hook personally. A corporation, with its limited liability, is generally different, unless there is recourse to an owner. He also notes Scripture’s Parable of the Talents treats earning a return as responsible.
EPISODE · 25:12 – 25:52Bankruptcy is a safeguard, not a cure
Because bankruptcy can end a debt without the lender’s consent, it protects borrowers. But Jerod says it is a mitigating factor, and it doesn’t change what a loan is. Most borrowers never use it, he notes, and carry debt for decades.
EPISODE · 20:29 – 26:07Consent isn’t the whole test
A fair-market deal that both sides sign is not always enough, the conversation concludes. As Catholics, the question includes whether a transaction builds up a brother or sister in Christ, echoing the Old Testament call to leave the edges of the field for the poor.
EPISODE · 31:21 – 33:18Questions to bring to a conversation
The episode also touched on how these ideas might shape a person’s view of lending-type arrangements. This is not a recommendation about any product or strategy. If the topic matters to you, these questions can help frame a discussion with your financial professional and, as appropriate, your pastor or a trusted spiritual advisor.
Jerod’s own advice: the Church is a deep well on these topics, and it is worth going deeper than headlines and reactions.
EPISODE · 26:58 – 30:46 · 33:34 – 35:20Five questions worth asking
- Who is the borrower: a person, or a business?
- Is there a personal guarantee or recourse to an individual?
- If things go wrong, is there a defined way out?
- What are the risks, costs and terms of the arrangement itself?
- Does this fit my values and my broader plan?
Primary sources mentioned in the episode
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