I have posted before on the subject of usury. There was once upon a time when usury was not simply illegal in the USA, but the USA defined what was considered usury. You should know a couple of facts:
In 1980, because of inflation, Congress passed the Depository Institutions Deregulation and Monetary Control Act exempting federally chartered savings banks, installment plan sellers and chartered loan companies from state usury limits. This effectively overrode all state and local usury laws. …
In the 1996 Smiley v. Citibank case, the Supreme Court further limited states’ power to regulate credit card fees, extending the reach of the Marquette decision. The court held that the word “interest” used in the 1863 banking law included fees, and, therefore, that states could not regulate fees. …
Some members of Congress have tried to create a federal usury statute that would limit the maximum allowable interest rate, but the measures have not progressed. In July, 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama. The act provides for a Consumer Financial Protection Agency to regulate some credit practices, but does not have an interest rate limit.
The bottom line is that banks can do whatsoever they like with regard to interest. That is, as long as consumers pay it, there is nothing to stop them. For those of you who are Orthodox, you need to know the following:
The First Council of Nicaea, in 325, forbade clergy from engaging in usury (canon 17). At the time, usury was interest of any kind, and the canon merely forbade the clergy to lend money on interest above 1 percent per month (12.7% APR). Later ecumenical councils applied this regulation to the laity.
Most of you know that today’s interest rates violate the canons of Nicea. Most of you do not realize that the Western part of the Church was even stronger against usury than the Eastern side of the Church. In 1179, within about 100 years of the schism, the III Lateran Council forbade the sacraments and Christian burial to those who charged interest. While that attitude no longer holds in the Roman Catholic Church, it is the Roman Catholic Church that has led the drive to forgive the foreign loans incurred by Third World countries–particularly those incurred under previous dictatorial governments–largely on the grounds that the amount borrowed has long been repaid by those countries. In other words, part of the argument is that “Christian” First World nations still have those loans only because of the compound interest they charged, and that this is abhorrent to the Catholic view of usury and how one treats the poor. I would heartily agree.
Canon 17 of the First Council of Nicea reads as follows:
Forasmuch as many enrolled among the Clergy, following covetousness and lust of gain, have forgotten the divine Scripture, which says, He has not given his money upon usury, and in lending money ask the hundredth of the sum [as monthly interest], the holy and great Synod thinks it just that if after this decree any one be found to receive usury, whether he accomplish it by secret transaction or otherwise, as by demanding the whole and one half, or by using any other contrivance whatever for filthy lucre’s sake, he shall be deposed from the clergy and his name stricken from the list.
For those of us who are Orthodox, should that not mean that we should be quite against interest rates above 12%? After all, this is a canon of and Ecumenical Council. For those of you who are Roman Catholic, your opposition to today’s climate of interest and fees should be equally strong, if not stronger. Remember, it was pointed out that this canon was extended by later councils to all Christians, not just the clergy.
I am switching to a credit union because of this fee. It was the last straw, but I still look for a way to get beyond the usury of the society in which we live. Islamic Banking looks very attractive, too…
I wonder, over and over, why some clergy are (rightly) concerned with Abortion and Sex, but when it comes to money they start talking about not putting politics in religion and about saving your “eternal soul” but nothing here and now.
When the world is going toward destruction, why bother about the here and now? Add to that the conviction that uncontrolled capitalism is God’s economic plan and a hearty dose of only the “deserving poor” should be helped, and you get something completely different from what the Desert Fathers advocated.
Completely. Different.
It is to weep.
We’re moving money to a local credit union for all kinds of reasons. To h*** with the big national banks. Going to work on putting our money where our mouth is when it comes to supporting our local economy and good community-building investments.
“It’s All Gonna Burn, so Why Bother?”
If I was going to rule like Kim Jong-Il or Fidel, I would LOVE my two-legged livestock to be that kind of Christian.
I wonder, over and over, why some clergy are (rightly) concerned with Abortion and Sex, but when it comes to money they start talking about not putting politics in religion…
I suspect it’s a blend of “Sex is JUICY! JUICY! JUICY!” and “Ka-CHING! — I mean Tithe”.
Me too. I wonder, over and over, why interpretation of every biblical reference to sexual morality is interpreted strictly literally (again, probably rightly), and yet even the most theologically conservative pastors/priests seem to develop a sophisticated sense of metaphor, symbol, allusion, and nuance when it comes to straightforward texts about the dangers of loving money, commands to give all your wealth away, and how the rich can hardly ever manage to enter heaven.
I have never ever heard a sermon from these conservatives that simply takes these texts literally, even though they seem to be some of the most brutally clear, un-nuanced sayings of Jesus.
It’s always the OTHER GUY’s Sin that gets preached against.
NEVER the one the Righteous Preacher personally benefits from.
More than that, I have been told more than once that I am engaging in politics on a disputed subject if I talk about rich and poor. I am totally against elective abortion, however I must say that whenever anyone speaks against any position of an anti-abortion person that is proof that they are not Christians. So only non-Christians disagree with an anti-abortion person. Meantime, speaking about rich and poor is proof that you are a liberal and puts your Christianity into doubt.
The end result is that Scripture is rift in twain. Some Scriptures are really Scriptures while other Scriptures are so hard to interpret that no one could possibly use them today in any practical way regarding the economic conditions in this country.
More than that, I have been told more than once that I am engaging in politics on a disputed subject if I talk about rich and poor.
Our Norteamericano version of pointing and saying “Him Communist” to the local Death Squad contact.
A question here: in most cases if you put your money in a bank account, the bank pays you interest for it. Nowhere as much as they would charge you if you were the one borrowing from them, of course, but a little nonetheless.
Would you consider that to also count as “usery”? Its not something one can easily avoid, in the modern world.
Second: what’s so special about 12%? What is the logic that says charging someone compounding interest at say 15% is eeevil, but doing so at 9% is fine?
Lastly, I think its disgusting that the banks get to make up whatever amount they want to charge you, for whatever nonsense reasons they like. Say you borrowed $100 from me, on the understanding that you’d pay me back $150 in five years. Would it be right for me to come and tell you six months later that I’m changing the agreement to you paying me back $200 in three years, and see that you do, or I’ll have you thrown in jail?
But when banks do things like that, its okay?
Or how about this? I borrow $100 from you, then when its time to pay you back, I only give you $90, because I’ve decided (without ever asking you!) that I’m going to keep $10 of it as “administrative fees”.
But then, I don’t own a bank.
The real problem with compound interest is exponential growth. No matter how small is the interest, the debt grows out of control. Resources are either limited or have a limited renewal rate.
So 1% is as evil as 2% or as 0.1%. With 1% per month the debt doubles in less than six years. With 0.1% per month there are 58 years before the debt doubles, but in only 192 years it grows 10 times, and in 384 years it grows 100 times, and 1000 times in 768 years. It is really scary if we think a little about it. We are not used to think about exponential phenomena in our daily life.
It is not sustainable in the long run. Solar radiation is more or less constant, which means that there is an upper limit to how much the global economy can grow. Bankers put their money into the hands of people and request to payed a compound interest. So the total sum of money all people own to bankers grows exponentially, but all people together cannot produce wealth exponentially (only some can at expense of the others). In the limit everything is to belong to the one, and all the others be in unpayable debt with him. In practice wars, poverty and destruction will come before.
And what’s worse, we collectively are already in debt, and it is not our fault. Approx. 50% of goods and services costs are already to pay interest.
See Margrit Kennedy book, “Interest and Inflation Free Money” for more on this point of view.
That is a very helpful explanation!