Deliverance From the Hands of Usurers

Daniel Nichols has posted a piece on the American Bishops’ failure to agree on a statement on the economy. One wishes that they had come out with a stern reminder of the Church’s perennial teaching against usury, and suggestions for overcoming it. Some Americans are attacking usury though; the eccentrics of the Occupy Wall Street  movement. They have had a brilliant idea for saving some people from usurers:

OWS is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it. As a test run, we spent $500, which bought $14,000 of distressed debt. We then ERASED THAT DEBT. (If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME.)

The name “Rolling Jubilee” is explicitly taken from the Old Testament jubilee. As one commentator puts it “it … feels great to have the opportunity to be an anti-bank for once. There’s something very good about forgiveness.”

Meanwhile, Front Porch Republic reports on a method from a completely different part of the American political “spectrum” to help poor immigrants avoid getting into the hands of usurers in the first place:

Eleven years ago, Bruno Rivas left Mexico City to make a better living for his family in San Francisco. He landed a job at a restaurant and began making some money, but couldn’t figure out how to break out of a cash system into a marketplace driven by credit. […] he was able to purchase items for daily provision, but without a means of building credit, he struggled to find a way to fund larger purchases or take bigger steps toward financial health. But then four years ago, Bruno learned about the Bay Area-based Mission Asset Fund (MAF)—an organization that has garnered nationwide recognition for its nontraditional approach to lending—and decided to join a peer lending circle, or “cesta populare” (“community basket” in Spanish). Joining a cesta meant that Rivas and the eight other members of his circle would contribute $100 every month to a communal pot. After drawing names to determine order, members would take turns collecting a loan that they could then put toward whatever they chose. When Rivas’ turn came around, he took the loan from the lending circle, combined it with savings from an Individual Development Account (IDA) that MAF had set up for him, and purchased equipment to start a screen printing business.

“Peer Lending Groups” are doing the same sort of thing as the montes pietatis.

7 thoughts on “Deliverance From the Hands of Usurers

  1. Benedict XIV defines it in Vix pervenit thus: “The nature of the sin called usury has its proper place and origin in a loan contract… [which] demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given…, but any gain which exceeds the amount he gave is illicit and usurious.” Thomas Storck has an excellent discussion of what that means here: http://distributistreview.com/mag/2012/01/is-usury-still-a-sin/

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  2. I meant a practical working understanding that can actually be applied. The definition you quote would cause every bishop in the US to be practicing usury in their lending practices within their own dioceses, which would in turn make it rather odd for you to ask them to condemn it.

    The point is, what is first needed from the Bishops is a realistic and reasonable explanation of what usury is in the context of the modern world.

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  3. Fair enough. The last section of Thomas Storck’s paper does make a stab at trying to spell out what the Church’s teaching on usury should concretely mean for Catholics in the current context, but more work needs to be done on this question.

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  4. Thomas Storck tries to write papers that have practical application, but inevitably fail miserably. I appreciate his efforts, but like most intellectual types he doesn’t for some reason have a clue how to be transform principles into concrete reality that would actually work.

    If Thomas Storck were to design a child’s swing from a tree,

    http://www.businessballs.com/treeswing.htm

    His would be himself under the tree looking up with pen and paper writing the history of swings and some theory on the virtue of swinging because it doesn’t require electrical power nor is it a product of consumerism, while some child stands there looking at him.

    What people need to know is how to actually apply the principle so that the principle can be applied in some kind of prudential manner.

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  5. Private debt is certainly more tragic then national debt, but I think that the way that national debt works is more clearly absurd. The entire tax revenue of Italy often does not pay of the interest on the Italian debt, so Italy borrows more money in order to pay of the interests on its existing debt…
    So Italy (and I suppose hundreds of other countries and companies and families) pays immense sums to its debtors, and ends up with even more debt. Of course finance has a way of looking utterly unreasonable from the outside, maybe somehow it makes more sense than I think.

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