In Crisis magazine, there was a well written article on the changing of Catholic doctrine, when it comes to the Church no longer condemning, (the sin), receiving interest on loans.
The author, Jay Richards, explains that the understanding of the use of money changed over time as having value to be used to make more money when starting a new business. Even even brings up Canon Law 1284,
5) pay at the stated time the interest due on a loan or mortgage and take care that the capital debt itself is repaid in a timely manner;
6) with the consent of the ordinary, invest the money which is left over after expenses and can be usefully set aside for the purposes of the juridic person;
This canon law tells dioceses and parishes to pay interest and to invest money. But, as far as I can see, it does not say they have to charge interest or earn interest. (Of course, in fact, they do.)
He also brings up Jesus’ saying:
“And why then didst thou not give my money into the bank, that at my coming, I might have exacted it with usury? Luke 19:23.
He uses Jesus’ parable to show that usury or taking interest on loans is a positive thing.
So he concludes that;
“And if we do keep it in mind, it should be clear that doctrine, as Catholics define it, has not changed. Put simply, usury is charging someone for something that has no value, in short, for defrauding someone, especially the poor and dependent, in a financial transaction. The Church is right to condemn it, as Pope Benedict XVI did in his 2009 encyclical Caritas in Veritate. Our thicker understanding of money simply leads us to recognize that most ordinary bank loans exact a cost on the lender and have value to the borrower, and so are not usurious. Perhaps there are other examples of the Church changing doctrine—though I doubt it—but her teaching on usury is not one of them.”
As a Catholic, I submit to all traditional Catholic doctrine, including not taking interest on money loaned to others. I put my money in a checking account that does not get interest.
My parents were members of the Catholic Workers. One of Dorothy Day’s prime objectives was to show that it was still a sin to take any interest and that earning money by money was earning money without working for it. She and my dad would quote many saints condemnation of taking interest.
My father then spent years writing about the evils of charging interest and kept writing to the Vatican, (Confraternity of the Doctrine of Faith), asking for a new hearing to rule on how charging of interest could be moral and practiced by Catholics. They never responded.
From what my dad said; it was a woman who had charged interest and went to confession. Her confessor brought this sin to the Confraternity to be judged on whether she could be absolved or not, but was ruled on. It is as could be said; it was left in limbo.
We traditional Catholics are considered strong on the Bible and morals, but soft on social justice issues, (like the causes of poverty). Charging interest or practicing usury, causes poverty. Many 3rd world countries are in poverty because of their external debts. Much of their gross income is used to pay just the interest.
Here in the United States, the privately owned Federal Reserve prints money and charges us interest on the loan. We owe them, China, Japan and other groups $12.6 trillion. On these trillions of dollars, interest is paid from our taxes. The national debt keeps increasing as we accrue interest and keep on borrowing more money. Our country is in very bad financial condition from all the interest that we are paying on the national debt.
Before “Catholics” charged interest, it was the Jews who did. You can read about that in Shakespeare’s “Merchant of Venice”. One way that Luther got the German kings and princes to go along with his revolution, was to allow them to charge interest.
I am sure that many of you will not like this blog because most people live on money invested to get money in return. But we need to be consistent and again not have amnesia when it comes to Church traditions, all of them. As traditional Catholics, we also care a great deal about the poor.
The original author of this blog passed away in July of 2016. RIP Father Carota.