Venzor explained that Catholic teaching rejects exploitative loans.
“Catholic social teaching is very clear on this issue,” he said. “It recognizes that it is both morally acceptable to earn reasonable and equitable profits in economic and financial activities, and morally reprehensible to lend money at unreasonably high rates of interest (a practice also known as usury).”
Venzor noted that the Catechism of the Catholic Church rejects usury as a violation of the commandment 'Thou shall not steal'. St. John Paul II, in a Feb. 4, 2004 general audience, denounced usury as “a scourge that is also a reality in our time and has a stranglehold on many people’s lives.”
In February the Montana Catholic Conference backed federal limits on payday and car title loans. It encouraged voters to ask their Member of Congress to back the Veterans and Consumers Fair Credit Act of 2019. The bill that would limit the interest rate on payday and car title loans. The bill would expand the 2006 Military Lending Act rate cap - which only covers active military members and their families - to all consumers. It would cap all payday and car-title loans at a maximum of a 36% APR interest rate.
The U.S. Catholic bishops have backed the bill.
In July the Consumer Financial Protection Bureau, a government agency overseeing consumer protections, revoked federal restrictions on payday loans, drawing objections from the U.S. Conference of Catholic bishops. The rules were announced in 2017, but the bureau said their legal and evidentiary bases were “insufficient.” The bureau said removing the rules would help “ensure the continued availability of small dollar lending products for consumers who demand them.”
The industry collects between $7.3 and $7.7 billion dollars annually from the practices that would have been barred, the bureau said.
Archbishop Paul Coakley of Oklahoma City, chair of the U.S. Conference of Catholic Bishops' domestic justice committee, objected in to the changes in a July 10 letter that characterized payday lending as “modern day usury.”
The Church has consistently taught that usury is evil, including in numerous ecumenical councils.
In Vix pervenit, his 1745 encyclical on usury and other dishonest profit, Benedict XIV taught that a loan contract demands “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.”
In his General Audience address of Feb. 10, 2016, Pope Francis taught that “Scripture persistently exhorts a generous response to requests for loans, without making petty calculations and without demanding impossible interest rates,” citing Leviticus.
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“This lesson is always timely,” he said. “How many families there are on the street, victims of profiteering … It is a grave sin, usury is a sin that cries out in the presence of God.”