“And that uncleanly image of deceit

Came up and thrust ashore its head and bust,

But on the border did not drag its tail.

The face was as the face of a just man,

Its semblance outwardly was so benign,

And of a serpent all the trunk beside.”

Dante’s Inferno: Canto 17:7-12, Usurers in the Seventh Circle of Hell

“How much do you owe?” he asked me. His question hung in the air as the embarrassment washed over me. I knew at some point I would have to tell my future husband about my student loan debt. Like quickly ripping off only half of a band aid, I got the first part out. Then I stopped. I feared his rejection, his criticism, or some other unknown reaction. He asked again, “Ness, how much?” OK, here we go. “One hundred sixty-five thousand.” Silence.

You Shall Not Charge Interest

The basic premise for charging interest on a loan is to mitigate the lender’s risk. There are two types of risk that the lender evaluates: borrower risk and collateral risk. If a borrower is a higher risk, such as scant credit history or poor track record of repayment, or if the value of the collateral, such as the value of a home for mortgages, is volatile, difficult to determine, or absent, then the lender charges the borrower a higher rate. This is why, for example, interest rates on payday loans, which are short term, high interest loans, are higher than mortgage loans.

Our modern understanding of usury is usually limited to the exorbitant rates charged to the poor, such as in the example of payday loans. However, Catholic teaching against usury is rooted in the Old Testament with the Dueteronomic law forbidding lending with interest to fellow Hebrews, “You shall not demand interest from your kindred on a loan of money or of food or of anything else which is loaned” (Deuteronomy 23:20). Notice that interest of any kind is prohibited, not just exorbitant rates to those who cannot afford it.

In Support of the Poor

Moral Theologian, Jennifer Herdt, writes that our perspective of interest began a radical transformation with the growth of cities and technological developments. Interestingly, the rise of the credit economy, which began to take hold in the late 15th century, was driven by the Franciscans. Alexander Lombard, provincial of the monastery in Lombardy, Italy, wrote a tractate on usury and outlined twelve cases in which lending at interest was acceptable, and sometimes admirable (Herdt, “Commerce and Communion in the History of Christian Thought,” 32).

From this, a new banking system emerged, the Monte di Pieta. Herdt writes, “As originally conceived, merchants donated money to the Monte to be lent at very low interest to the poor. In this context, moneylending was a form of charitable activity and service to the poor; the interest charged served only to cover the costs of the enterprise. This sort of moneylending … was framed as a public service, which helped to eliminate poverty by enabling the poor to establish small businesses” (33).

A Scourge of Our Time

To be sure what the Franciscans had envisioned with the Montes was in support of the common good. And if the vices of greed and the tendency to exploit others for selfish gain did not plague the human family, then such virtuous banking would be thriving today. However, as St. John Paul II once pointed out, usury is a scourge of our time that has a “stranglehold on many people’s lives”.

The saint goes on to describe a twofold slavery. First, on the lenders part, slavery to the sin of greed. Second, on the borrower’s part, the chains of the debt that tethers them to the lender and the temptation to continue to borrow, either out of their own greed rooted in a consumerist mentality, or out of necessity to support themselves and their families. This is readily apparent in the $860 billion in credit card debt in the U.S., the $1.75 trillion in student loan debt, and $30.5 trillion in federal debt.

The Christian Response

It would seem that the simple solution is to forgive the outstanding debt, even from a Christian perspective. For example, we might arrive at such a conclusion from the Lord’s Prayer, “forgive us our debts as we forgive our debtors” (Luke 11:4), or perhaps the parable of the unforgiving servant (Matthew 18:21-34).

However, the debt is not the root problem in all this. The debt is rather symptomatic of the underlying problem. Forgiving the student loan debt is akin to putting a bandaid on a bleeding femoral artery, or Chevy Chase trying to plug the holes in the Hoover Dam with his chewing gum. It’s not a solution, and even more importantly, it is not a Christian response.

The problem is the exploitation of the human person for economic gain, the reduction of the human person to an integer in the profit equation on par with other inputs, such as raw material, machinery and land (See, Laborem Exercens, 12). Usury is the lending practice that reduces the human person to a financial instrument with an anticipated rate of a return. It is for this reason Dante places usurers in the seventh circle of hell along with murderers who do violence against others.

To be clear, the Church recognizes the value of the profitability of businesses: “When a firm makes a profit, this means that productive factors have been properly employed” (Centesimus Annus, 35). However, She is not blind to the risk of the abuse of the human family involved: “it is possible for the financial accounts to be in order, and yet for the people– who make up the firm’s most valuable asset– to be humiliated and their dignity offended” (ibid).

My own student loan payment is more than my house payment with a rate that is nearly double my mortgage rate. After graduating from college, I was advised not to worry about my student loan because “Obama would forgive it.” To a twenty-two-year-old entering a tanked job market, that prospect was a huge relief. So, for seven years I let the thing accrue interest and patiently waited for Obama to wipe my slate clean. Eight years came and went and my loan accrued over $50,000 in interest. To expect my children to foot the bill for my irresponsibility is just as unjust as the usurious system that not only encourages borrowing, but gives false hope of disappearing debt. Debt doesn’t disappear, someone else pays for it. The Christian response then is to stop the injustice and take responsibility for our bad decisions while advocating for a virtuous lending system along the lines the Franciscans initially envisioned.

Your sister in Christ,

Vanessa

A previous version of this article appeared on Catholic Women in Business on 6-23-22.