Thomas Aquinas and Usury

The world is full of financial hardship, and American society possesses a great deal of controversy concerning lending. Unfortunately, short term lending, such as payday loans or title loans, creates a structural void within American society. According to Wikipedia, “Structural inequality is defined as a condition where one category of people are attributed an unequal status in relation to other categories of people” (wilipedia.com). When working class Americans apply for a payday, the unequal status between upper and middle class possess a bigger separation financially. The never-ending process of a short term financial fix becomes lifelong debt. Thus, middle class society becomes lower class society. Eventually, working class society will struggle to say above the poverty line. In addition to an imbalance in society classes, short term lending targets consumers who life paycheck to paycheck. In Rigging the Game by Michael Schwalbe, the author explains the reproduction of inequalities. Schwalbe discusses the different kinds of capitals human, social, and cultural (10). The three capitals unknowingly shape Americans social system. Many businesses capitalize on these capitals knowing no laws or regulation exists to stop them from capitalizing on individuals who no faults of their own were born into these unfair capitals. As a result, short term lenders possess the ability to have extremely high interest rates and outrageous fine print penalties because there is little

The purpose of usury laws was to regulate the maximum interest rates of loans. This law was created to protect borrowers from excessively high interest rates. It insured that lenders could not put the borrower in a situation where they were not able to fully pay off their debt. However, as said on investopedia.com, “In the United States, individual states are responsible for setting their own usury laws.”

If the provided bank account doesn’t have sufficient funds, the borrower would incur a bounced check fee from their financial institution in addition to an increase in the loans interest rate. For families who were strapped before this vicious loan cycle, it would appear that there is no way out.

I, myself, I am not expert in economy; nonetheless, will try to get my point across. Policy makers, economist, bankers, and so on, usually advise is: do not take a loan unless the person, agency, country know, or at least have a plan on how to repay. In fact,

When I asked to borrow money, the bank told me that they did not believe in loaning money to buy food. I needed money because my family was starving and I wasn’t able to feed them. Because of this, I lost all of my children and four adults from my family. I believe that this is morally unacceptable because of the ethical theory of rights. People should have the right to survive with food and self-sufficiency. The bank should be more utilitarian. They should seek the greatest good for the greatest number by loaning families that are starving some money to help them

“Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry. This above all: to thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man. Farewell. My blessing season this in thee”

This is a problem because now the banks have little incentive to give people loans that they can pay back. So they will just give them higher loans, because if they can’t pay them back, the bank doesn’t get hurt. Whoever originally gives out the money must be held accountable for its repayment; otherwise there is a serious conflict of interest.

If you put people before you, for this reason, they will take an advantage of you. This proves to them that you cant say no, therefore they’ll be able to walk all over you. For instance, if you keep loaning others money, they will keep wanting more and more. This also proves that they will never take you serious. For example, if you are mad at them they wont ever take you serious and just brush it off.

Finnis closes: "Aquinas' record of usury, brought with his general hypothesis of remuneration, in this manner distinguishes standards (not leads made up by moralists or ministers) which empower us to see why in his period it was unjustifiable for banks to make a charge (however portrayed) in the way of benefit,

Once on our lifetime, we all will go to a bank and ask for a loan which is borrowing money. It’s not wrong to borrow money. It’s just how you pay it back that determines if you are responsible to have their money which is shown by looking at your credit score. Banks love people that pay on time in the full amount and even though it is still ok to

So many want to abolish usury or the interest rate due to thoughts of unfairness or evil furthering the root of all evil. So many ancient philosophers thought of such practices as unlawful and inhibiting by making the rich richer and the poor, well you know the term.

However, the issue with Martin’s conclusion is that he fails to support his claim that money was truly accepted as credit among more than just a few. His evidence better defends the position that money has always operated like transferable credit. Martin does point to a few scholars that agreed with him, like Lowndes and Law, but these were revolutionary ideas and were either rejected or their plans failed miserably. By accidentally defending the position that money operates like credit so well, while neglected other major parts of his thesis, Martin undermines it and draws the reader’s attention in another

Usury laws establish a maximum rate of interest that cannot be exceeded for certain loans. Usury laws are intended to protect consumers from unscrupulous and excessive interest rates. It is the responsibility of individual states to determine the appropriate maximum usury limit (Investopedia, n.d.). Revised statute, title 9 section 3500 is the location of Louisiana’s usury laws. In part, Louisiana’s usury laws pertain to mortgage loans obtained by individuals. The usury laws aim at protecting consumers from unfair interest rates on their mortgage loan (Louisiana State Legislature, n.d.).

As the lender is taking much more risk on such an arrangement the amounts you can borrow are much lower and the rates of interest much higher.

Currently, there is a lot of controversy surrounding mini-banking and subprime lending practices, which include “payday loans” and high interest credit cards, because some feel these financial practices are not fair. The purpose of usury laws is to place a cap on excessive interest rates. It has become commonplace for many unsavory lenders to take advantage of current laws, which charge on excessive fees and rates, all in the name of profit. According to Elizabeth Warren, the government should return to usury laws, laws that go back to biblical times, and colonial times, where strong usury laws were in place. In 1979, a new law was discretely changed allowing financial companies to remove limits on rates. (Maher & Warren, 2010) By examining the strengths and weaknesses of usury laws, from a consequentialism and contractarianism perspective, we can see how there needs to be a balance in how companies engage in lending practices.