usury

Definition of usury

Etymology

From Latin usuria, from usura "lending at interest, usury" from usus 'use', from stem of uti 'to use'

Pronunciation

• enPR: yoÍžo'zhÉ™-rÄ", IPA: /ˈjuÊ'əɹi/, SAMPA: /"juZ@ri/
• Audio (US) ^[?]

Noun

usury (countable and uncountable; plural usuries)

1. (countable) An exorbitant rate of interest, in excess of any legal rates or at least immorally.
2. (uncountable) The practice of lending money at such rates.
3. (uncountable, archaic) The practice of lending money at interest.
   
   * 4th Century BCE, Template:rftranslator Aristotle, Politics, Book I, Part X,
   "The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest."

Further reading

Usury is the practice of charging excessive, unreasonably high, and often illegal interest rates on loans.

Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate (as well as charging a fee for the use of money, such as at a bureau de change). In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law. The term is largely derived from Christian religious principles; Riba is the corresponding Arabic term and ribbit is the Hebrew word.

The pivotal change in the English-speaking world seems to have come with the permission to charge interest on lent money: particularly the 1545 act "An Acte Agaynst Usurie" (37 H.viii 9) of King Henry VIII of England.

Usury and the law

"When money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use, the increase is called interest by those who think it lawful, and usury by those who do not." (Blackstone's Commentaries on the Laws of England, p. 1336).

In the United States, usury laws are state laws that specify the maximum legal interest rate at which loans can be made. US Congress has opted not to regulate interest rates on purely private transactions, although it arguably has the power to do so under the interstate commerce clause of Article I of the Constitution.

US Congress has opted to put a federal criminal limit on interest rates by the Racketeer Influenced and Corrupt Organizations Act (RICO) definitions of "unlawful debt" which make it a federal felony to lend money at an interest rate more than two times the local state usury rate and then try to collect that "unlawful debt".

It is a federal offense to use violence or threats to collect usurious interest (or any other sort). Such activity is referred to as loan sharking, although that term is also applied to non-coercive usurious lending, or even to the practice of making consumer loans without a license in jurisdictions that require licenses.

Yet all loan contracts (notes) provide that if the principal and the interest are not paid, the lender has the right to go to law and obtain a judgment against the debtor, which may, if the debtor does not pay the judgment, be taken by the sheriff, that is, by force. So in reality all ordinary loan contracts threaten violence against the debtor to ensure that the loan and interest are paid, and to collect by seizure if not paid.