Tom Hoopes is Vice President of College Relations and writer in residence at Benedictine College in Atchison, Kansas. He has written for the Register for more than 20 years and was its executive editor for 10. His writing has appeared in First Things’ First Thoughts, National Review Online, Crisis, Our Sunday Visitor, Inside Catholic and Columbia. He has served as press secretary for the Chairman of the U.S. House Ways & Means Committee. He and his wife, April, were editorial co-directors of Faith & Family magazine for 5 years. They have nine children.
Usury isn’t often in the news.
But with his new credit card reforms “Obama has proposed and Congress has passed a series of minor reforms,” says Dick Morris, that “fail to reform the most basic offense of the companies: their usury.”
Pope Benedict XVI and the Vatican have also spoken up about usury lately.
Here’s what Dick Morris explains:
“Congress explicitly rejected any limitation on the interest rate credit card companies can charge. It remains perfectly legal for them to charge rates that would make a loan shark blush.
“In our book Fleeced, we explain how, until 1979, credit card interest was subject to usury limits of the various states. But the Supreme Court emasculated these limits by ruling that the state of the lender, not of the borrower, had the sole power to legislate interest rate limits. South Dakota swiftly jumped into the void the court created, eliminating any usury limits. All the credit card companies moved there and took advantage of the regulatory vacuum to hike up their rates to unconscionable levels.
“Competition can do nothing to force down rates since 90% of the credit cards are issued by a handful of companies. And states are paralyzed when it comes to regulating rates. It is up to Congress to act.”
The Catechism of the Catholic Church, in the 1990s, put usury into a dire context.
Catechism No. 2269: “The acceptance by human society of murderous famines, without efforts to remedy them, is a scandalous injustice and a grave offense. Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them.”
But it seems that usury is no longer condemned only at the famine level.
The Compendium of the Social Doctrine of the Church quotes John Paul II from a Feb. 3, 2004, general catechesis. There, the Pope calls for a commitment “not to practice usury — a plague that is a disgraceful reality even in our days that can place a stronghold on the lives of many people.”
The Compendium of the Catechism of the Catholic Church, promulgated at the beginning of Benedict’s pontificate, seems to broaden the sense of usury even more. One of the answers to the question (508) “What is forbidden by the seventh commandment?” is:
“Also forbidden is tax evasion or business fraud; willfully damaging private or public property; usury; corruption; the private abuse of common goods; work deliberately done poorly; and waste.”
Pope Benedict XVI underlined the word usury in his commentary on the Psalms on Nov. 2, 2005, later that year.
“The heart of this fidelity to the divine word consists in a fundamental choice of charity towards the poor and needy: ‘The good man takes pity and lends ... Open-handed, he gives to the poor” (vv. 5, 9). The person of faith, then, is generous; respecting the biblical norms, he offers help to his brother in need, asking nothing in return (Deuteronomy 15: 7-11), and without falling into the shame of usury, which destroys the lives of the poor.’”