The argument is logically valid. There are two tempting ways to reformulate it:
It is immoral to rent one’s property to one’s neighbor for an exorbitant fee.
Lending at exorbitant interest is a form of renting one’s property for an exorbitant fee.
Conclusion: Lending at exorbitant interest is immoral.
An alternative reformulation:
It is moral to rent one’s property to one’s neighbor for a fair fee.
Lending at fair interest is a form of renting one’s property for an fair fee.
Conclusion: Lending at fair interest is moral.
Unfortunately, these reformulations don’t get us all the way there. Authoritative Church teaching on usury was promulgated in 1745 by Pope Benedict XIV, in the encyclical Vix Pervenit. The subject has not been formally revisited since, so this teaching is the best we have. It pulls no punches about usury:
I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties 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. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.
II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.
III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.
IV. There are many different contracts of this kind. In these contracts, if equality is not maintained, whatever is received over and above what is fair is a real injustice. Even though it may not fall under the precise rubric of usury (since all reciprocity, both open and hidden, is absent), restitution is obligated. Thus if everything is done correctly and weighed in the scales of justice, these same legitimate contracts suffice to provide a standard and a principle for engaging in commerce and fruitful business for the common good. Christian minds should not think that gainful commerce can flourish by usuries or other similar injustices. On the contrary We learn from divine Revelation that justice raises up nations; sin, however, makes nations miserable.
V. But you must diligently consider this, that some will falsely and rashly persuade themselves-and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest. Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason. Everyone knows that man is obliged in many instances to help his fellows with a simple, plain loan. Christ Himself teaches this: “Do not refuse to lend to him who asks you.” In many circumstances, no other true and just contract may be possible except for a loan. Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained.
We can imagine the language about “parallel contracts” being elaborated in a more Catholic society to create a form of risk-insurance payment that looks like interest but isn’t, which would be analogous to the sorts of interest-like-but-not-interest payments that Islamic banking uses to get around Quranic injunctions on usury.
Another way to think about it is that the time value of money—the price of the opportunity cost I pay by letting you have my money when I could be out investing it myself—is part of the money. So in that sense, we could think of “fair interest” as being a payment for no more than what has been lent: both the money, and its time value. Any interest charged above the money’s time value would be usurious.
The subject is vexed: the Church, as I said, has not formally promulgated any teachings on usury since Vix Pervenit. But the Code of Canon Law contemplates a Church living in the modern world of interest.
Canon 1284 §2(5) requires administrators of the Church’s temporal wealth to “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” while §2(6) requires them to “invest the money which is left over after expenses….” So presumably, the Church has made some kind of reluctant peace with this.
On the one hand, you have the Scourging of the Money Changers. On the other, the Parable of the Talents. It’s confusing. Makes me grateful I’m just a layman.
But Mark’s (and Dante’s) sentiments are still those of a Catholic Christian in the mainstream of our Tradition. Good for them.