Interest Rates, Usury, and the Council of Nicea

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Many people like to say, “Oh the Catholic Church can and does change. Just as the Church “changed her mind” on usury, so the Church can “change her mind” about ______ (Fill in the blank: abortion, contraception, women’s ordination, etc.).

Is this true? Did the Church flip flop on the moral issue of usury?

First what is “usury”? Usury is charging excessive interest. Not interest per se. Even the Dominicans of Salamanca of the 16th century recognized this (and also the problems of inflation and price flux).

The key text however in this debate should be Canon XVII of the First Ecumenical Council of Nicea in AD 325, which reads:

Since many clergyman have been induced by greed and avarice to forget the sacred text, “who does not put out his money at interest”, and to charge one per cent a month on loans, this holy and great synod judges that if any are found after this decision to receive interest by contract or to transact the business in any other way or to charge a rate of fifty per cent or in general to devise any other contrivance for the sake of dishonourable gain, they shall be deposed from the clergy and their names struck from the roll.

So a priest who charged interest over one percent a month was to be convicted and thus laicized (i.e. struck from the canonical roll of the bishop). So what is “one per cent per month”? It is what we would call today an annual percentage rate of 12.7%. That’s a pretty high rate given our current Fed established rate.

Thus, the ecumenical council of Nicea I, made a provision for a limited form of loaning money – even for the clergy.

One more thing to be said is that our contemporary “money” is a fiat currency that is not backed by any limited natural element like gold. Hence, new money can be printed and consequently, we experience inflation (i.e. the more dollars in existence leads to a less valuable dollar over time). Since inflation constantly eats away at the value of a paper currency, “loaning” money without interest is actually unjust since it does not recognize the continual depletion of value of currency in such a situation.

Disclaimer: I’m against debt and I agree with the divinely inspired Book of Proverbs – he who enters into debt enters into a kind of slavery. See Prov 22:7.

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Category: Church Fathers
Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Comments Policy: I reserve the right to delete comments that are offensive or off-topic. If your comment contains a hyperlink to another site, your comment automatically goes into "Comments Purgatory" where it waits for release by way of moderation.

Interest Rates, Usury, and the Council of Nicea

by

Many people like to say, “Oh the Catholic Church can and does change. Just as the Church “changed her mind” on usury, so the Church can “change her mind” about ______ (Fill in the blank: abortion, contraception, women’s ordination, etc.).

Is this true? Did the Church flip flop on the moral issue of usury?

First what is “usury”? Usury is charging excessive interest. Not interest per se. Even the Dominicans of Salamanca of the 16th century recognized this (and also the problems of inflation and price flux).

The key text however in this debate should be Canon XVII of the First Ecumenical Council of Nicea in AD 325, which reads:

Since many clergyman have been induced by greed and avarice to forget the sacred text, “who does not put out his money at interest”, and to charge one per cent a month on loans, this holy and great synod judges that if any are found after this decision to receive interest by contract or to transact the business in any other way or to charge a rate of fifty per cent or in general to devise any other contrivance for the sake of dishonourable gain, they shall be deposed from the clergy and their names struck from the roll.

So a priest who charged interest over one percent a month was to be convicted and thus laicized (i.e. struck from the canonical roll of the bishop). So what is “one per cent per month”? It is what we would call today an annual percentage rate of 12.7%. That’s a pretty high rate given our current Fed established rate.

Thus, the ecumenical council of Nicea I, made a provision for a limited form of loaning money – even for the clergy.

One more thing to be said is that our contemporary “money” is a fiat currency that is not backed by any limited natural element like gold. Hence, new money can be printed and consequently, we experience inflation (i.e. the more dollars in existence leads to a less valuable dollar over time). Since inflation constantly eats away at the value of a paper currency, “loaning” money without interest is actually unjust since it does not recognize the continual depletion of value of currency in such a situation.

Disclaimer: I’m against debt and I agree with the divinely inspired Book of Proverbs – he who enters into debt enters into a kind of slavery. See Prov 22:7.

Posted on
Category: Church Fathers
Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Comments Policy: I reserve the right to delete comments that are offensive or off-topic. If your comment contains a hyperlink to another site, your comment automatically goes into "Comments Purgatory" where it waits for release by way of moderation.