Riba ( ) is, as currently defined, the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Initially, usury means any kind of interest. Loans can be considered usury due to excessive or abusive interest rates or other factors. Historically, in some Christian societies, and in many Islamic societies even today, charging interest at all would be considered usury. A person who practices usury may be referred to as a usurer, but the more general term in contemporary English is the loan shark.
This term can be used in a moral sense - to condemn, take advantage of another person's misfortune - or in the legal sense in which the interest rate can be regulated by law. Historically, some cultures (eg, Christianity in much of medieval Europe, and Islam in many parts of the world today) have considered charging interest for loans as sin.
Some of the earliest known criticisms of usury come from Vedic texts in India. Similar criticisms are found in religious texts of Buddhism, Judaism, Christianity and Islam (the term is usury in Arabic and
Video Usury
Historical sense
Banking during the Roman Empire was different from modern banking. During the Principate, most of the banking activities were carried out by private individuals operating as major banking companies today. Anyone who has available liquid assets and wants to lend them can easily do so.
Annual interest rates for loans vary in the range of 4-12 percent, but when interest rates are higher, usually not 15-16 percent but either 24 percent or 48 percent. The clear absurdity of the intermediate level shows that the Romans may have difficulty calculating interest in anything other than the mathematically easier level. They quote it every month, and the most common level is a multiple of twelve. Monthly rates tend to range from simple fractions to 3-4 percent, probably because lenders use Roman numerals.
Lending during this period is largely a private loan issue addressed to people who are constantly in debt or temporarily until the harvest time arrives. Mostly, it's done by rich people who are ready to take a high risk if profits look good; interest rates are set personally and almost entirely unrestricted by law. Investments are always considered a matter of personal gain, often on a large scale. Banking is a small assortment behind the street, run by the lower-middle class of small shopkeepers. In the 3rd century, the acute currency problem in the Empire encouraged the banks to decline. The rich who were in a position to take advantage of the situation became loan sharks as increasing tax demands in the last days of the last Empire paralyzed and ultimately destroyed the peasant class by reducing the peasants into slavery. It is clear that usury means the exploitation of the poor.
The First Council of Nicea, in 325, prohibited priests from engaging in usury (canon 17). At that time, usury is interest in any form, and the canon forbids the priest to lend money at an interest rate even as low as 1 percent per year. The ecumenical council then applies this rule to the laity.
Lateran III decides that people who receive a loan interest can not accept the sacrament or Christian cemetery. Pope Clement V convinced the right to seize a heretics in 1311, and abolished all the secular laws that allowed him. Pope Sixtus V condemns the practice of filling the flowers as "disgusting to God and man, condemned by holy canons, and contrary to Christian charity."
The theological historian John Noonan argues that "the doctrine [riba] is uttered by the popes, expressed by the three ecumenical councils, announced by the bishops, and taught unanimously by theologians."
The certain negative historical interpretation of usury brings about social connotations about "unjust" or "discriminatory" lending practices. Historian Paul Johnson, commented:
Most early religious systems in the ancient Near East, and secular codes emerging from them, did not forbid usury. This society considers inanimate objects as living, like plants, animals and humans, and is capable of reproducing itself. Therefore if you are lending 'food money', or any monetary token, it is legitimate to charge interest. Food money in the form of olives, dates, seeds or animals lent as early as c. 5000 BC, if not earlier.... Among Mesopotamia, Het, Phoenician and Egyptian, interest is legal and is often established by the state. But the Hebrews took a different view of the matter.
The Hebrew Bible organizes the collection of flowers. Flowers can be charged to foreigners but not among the Hebrews.
Deuteronomy 23:19 Do not lend flowers to your brother: the interest, the profit, the flowers of everything that is lent to the flower.
Deuteronomy 23:20 To the stranger that you may lend to the flowers; but to your brother, do not lend a flower; that L ORD Your God can bless you in everything you have put in your hands, on the land where you go to have it.
The Israelites were forbidden to charge interest on loans granted to other Israelis, but were allowed to charge interest on transactions with non-Israelites, because the Israelites were often among the Israelites for business purposes; but in general, it is considered beneficial to avoid debt at all, to avoid being tied to others. Debt should be avoided and not used to finance consumption, but only taken when needed; however, the law against usury is among the many laws that the prophets condemn people for violating.
Johnson argues that the Torah treats lending as philanthropy in the poor whose purpose is collective survival, but which is not obliged to charity for outsiders.
The large number of Jewish legal scholarships in the Dark Ages and the Middle Ages were devoted to making fair, honest and efficient business deals.
Riba (in the original sense of every interest) is sometimes criticized by a number of religious leaders and philosophers in the ancient world, including Moses, Plato, Aristotle, Cato, Cicero, Seneca, Aquinas, Muhammad, Jesus, Philo and Gautama Buddha. For example, Cato said:
"And what do you think of usury?" - "What do you think of murder?"
Interest of any kind is prohibited in Islam. Thus, special banking codes have been developed to serve investors who want to obey the laws of the Qur'an. (See Islamic banking)
When the Jews were excommunicated from most professions by local rulers, Western churches and unions, they were pushed into marginal jobs deemed socially lesser, such as taxes and rent collection and borrowing money. The natural tension between creditors and debtors is added to social, political, religious, and economic tensions.
... Financial oppression of Jews tends to occur in the least favored areas, and if the Jews react by concentrating on lending money to Gentiles, unpopularity - and of course, the pressure - will increase. Thus the Jews became an element in the vicious circle. Christians, on the basis of biblical rules, condemn absolute decision-making, and out of 1179 those who practice it are ostracized. The Catholic autocrats often impose the most severe financial burden on the Jews. The Jews reacted by engaging in a business where Christian laws really discriminated against them, and became identified with the hated moneylender trade.
In England, the Crusaders departed to join the debtor crowd in the massacre of Jews in London and York in 1189-1190. In 1275, Edward I of England authorized the Statute of the Jewry which made illegal usury and linked it to the desecration of religion, to seize the assets of the offenders. Dozens of British Jews were arrested, 300 people hanged and their property fell into the hands of the Crown. In the year 1290, all Jews should be expelled from England, allowed to take only what they can bring; the remainder of their property belongs to the Crown. Riba is cited as the official reason for the Expulsion Decree; However, not all Jews were expelled: it is easy to avoid expulsion by converting to Christianity. Many other crowned European chiefs expelled the Jews, although once again converted to Christianity was no longer considered Jewish (see article on marranos or crypto-Judaism).
The growth of Lombard bankers and pawnshops, who moved from city to city, were along pilgrim routes.
In the 16th century, short-term interest rates dropped dramatically (from about 20-30% p.a to about 9-10% p.a.). This is due to subtle commercial techniques, increased availability of capital, Reforms, and other reasons. The lower level weakens the religious objections about the loan with interest, though the debate does not stop at all.
The papal prohibition on usury means that it is a sin to impose interest on a loan of money. As Thomas Aquinas puts it, the natural essence of money is as a measure of value or intermediary in exchange. The increase of money through usury violates this essence and according to the same Thomistic analysis, fair transactions are characterized by the exchange equation, in which each party accepts its rights. The interest on the loan, more than anything, will violate the balance of exchange between the debtor and the creditor and therefore unfair.
Charles Eisenstein argues that a significant change in the English-speaking world comes with the legitimate right to impose interest on money lending, in particular Law 1545, "An Act Against Usurie" (37 H. viii 9) of King Henry VIII of England.
Maps Usury
Religious context
Judaism
Jews are prohibited from using riba in dealing with fellow Jews, and these loans should be regarded as tzedakah, or charitable. However, there is a license to impose lending interest to non-Jews. It is described in the Jewish scriptures of the Torah, which Christians hold as part of the Old Testament, and other books of Tanakh. From Tanakh 19-17 of the Jewish Publication Society, with Christianity number, where different, in brackets:
Exodus 22:24 (25) - If you lend money to one of my people, even to the poor with you, do not be a creditor; Do not be interested in him.
Leviticus 25: 36 - Do not be attracted to him or increase; but fear your Lord; that your brother can live with you.
Leviticus 25: 37 - Do not give him your money on flowers, or give him your victory for improvement.
Deuteronomy 23:20 (19) - Do not lend flowers to your brother: interest money, interest from victory, interest on everything that is lent on flowers.
Deuteronomy 23:21 (20) - To foreigners you may lend in interest; but to your brother, do not lend a flower; that the Lord your God may bless you in all that you give to you in the land where you are going to possess it.
Ezekiel 18: 17 - who has withdrawn his hand from the poor, who have not received interest or increased, has executed the Mining ordinances, have walked in My statutes; he will not die because of his father's disobedience, he will surely live.
Psalm 15: 5 - He who does not spend his money on flowers, or take a bribe on an innocent person. He who does these things will never be moved.
Some historical rules in Jewish law have reduced the allowance for usury against the Gentiles. For example, the fifteenth-century commentator Rabbi Isaac Abrabanel declared that the rubric allowing interest does not apply to Christians or Muslims, since their belief system has a common ethical basis derived from Judaism. The medieval commentator Rabbi David Kimchi conveyed this principle to non-Jews who showed consideration for the Jews, saying that they should be treated with equal consideration when they borrow.
Islam
The following quotation is an English translation of the Qur'an:
Those who wear usury are in the same position that is controlled by the influence of the devil. This is because they claim that usury is the same as trade. However, God permits trade, and prohibits usury. Thus, whoever heed this command from his Lord, and refrain from usury, he can retain his income in the past, and his judgment is upon God. As for those who survive in usury, they go to hell, where they abide forever ( Al-Baqarah 2: 275 )
God cursed usury, and blessed charity. God does not like everyone who sins. Those who believe and do good deeds and build worship and pay the poor, their reward is with their Lord and there will be no fear of them and they will not grieve. O you who believe, you must observe God and refrain from all kinds of usury, if you are a believer. If you do not do it, expect war from God and His messenger. But if you repent, you can maintain your capital, without causing injustice, or incurring injustice. If the debtor can not afford to pay, wait a better time. If you hand over a loan as a charity, it will be better for you, if you only know. ( Al-Baqarah 2: 276-280 )
O you who believe, do not take any usury, plus more and more. Observe God, so that you can succeed. ( Al-'Imran 3: 130 )
And to practice usury, which is forbidden, and to eat the people's money illegally. We have prepared for the unbelievers among them a painful retaliation. ( Al-Nisa 4: 161 )
Usury that is practiced to increase the wealth of some people, gets nothing from God. But if people give for charity, seeking God's pleasure, they are the ones who receive the many fold rewards. ( Ar-Rum 30:39 )
Muhammad's attitude to usury is articulated in his Last Sermon
O people, as you think this month, today, this city is Sacred, so consider the life and property of every Muslim as a sacred trust. Return the goods entrusted to you to their rightful owner. Do not hurt anyone so no one hurt you. Remember that you will indeed meet your Lord, and that HE will actually take your actions into account. GOD has forbidden you to take interest (interest), therefore all future interest obligations will be revoked. Your capital, however, is yours. You will not cause or suffer injustice. Allah has decreed that there will be no flowers and that all the flowers because Abbas ibn 'Abd'al Muttalib (uncle of the Prophet) should be immediately released...
Agama Kristen
The first of the scholastic Christian theologians, St. Anselm of Canterbury, led a shift of thought labeled as the charging of flowers just like theft. Previously usury has been seen as a lack of charity.
St. Thomas Aquinas, the prominent scholastic theologian of the Roman Catholic Church, argues that the collection of flowers is wrong because it means "double filling", which weighs both the object and the use of it. Aquinas says it will be morally wrong in the same way that if someone sells a bottle of wine, billed for a bottle of wine, and then charged for the person who uses the wine to actually drink it. Similarly, one can not charge a piece of cake and to eat a piece of cake. But this, Aquinas says, is what usury does. Money is a medium of exchange, and is used when it is spent. For a fee for money and for its use (by shopping) therefore to charge money twice. This is also to sell time because the cost of the insurer, basically, for the time when money is in the hands of the borrower. However, time is not a commodity that anybody can fill. In cursing usury, Aquinas was much influenced by Aristotle's newly discovered philosophical writings and his desire to assimilate Greek philosophy with Christian theology. Aquinas argues that in the case of usury, as in other aspects of Christian revelation, Christian doctrine is reinforced by the rationalism of Aristotelian natural law. Aristotle's argument is that the interest is not natural, since money, as a sterile element, can not naturally reproduce itself. Thus, the usury of conflict with such a law of nature alludes to Christian revelation: see Thought of Thomas Aquinas.
Prohibiting usury does not prevent investment, but stipulates that in order for investors to share in profits, it must share the risk. In short he should be a joint venturer. Just to invest the money and expect it to be returned without regard to the success of the business is to make money simply by having money and not by taking risks or by doing any work or with any effort or sacrifice at all, ie usury. St. Thomas quotes Aristotle as saying that "life with usury is very unnatural". Islam also condemns usury but allows trade (Al-Baqarah 2: 275) - an alternative that suggests investment and shares profit and loss rather than simply sharing profits through interest. Judaism condemned usury against the Jews, but allowed it against the Gentiles. (Deuteronomy 23: 19-20) St. Thomas allows, however, fees for actual services are provided. So a banker or lender can charge you for the actual job or business as he did for example. any fair administration fee. The Catholic Church, in a decree of the Lateran Fifth Council, explicitly allows such accusations in credit-unions for the benefit of the poor known as "montes pietatis".
In the 13th century Cardinal Hostiensis mentions thirteen situations in which the imposition of immoral flowers. The most important of these is the lucrum cessans (profit provided) that allows the lender to charge interest "to compensate him for his past gain in investing the money himself." (Rothbard 1995, p.Ã, 46) This idea is very similar to the opportunity cost. Many scholastic thinkers who argue for a ban on accusations of interest also debate the legitimacy of profit lucrum cessans (eg Pierre Jean Olivi and St. Bernardino of Siena). However, the exclusion of Hostiensis, including for lucrum cessans, was never accepted as official by the Roman Catholic Church.
The Roman Catholic Church has always condemned usury, but in modern times, with the emergence of capitalism and disestablishment of the Catholic Church in predominantly Catholic countries, the prohibition of usury has not been enforced.
The Encyclical Benedict XIV Vix Pervenit gives the reason why usury is a sin:
The nature of sin called riba has the right place and origin in a loan contract... which demands, by its very nature, that one returns to the other only as much as he has received. Sin rests on the fact that sometimes the creditor wants more than he has given... but any profit that exceeds the amount he gives is forbidden and usury.
One can not forgive the sin of usury by saying that the profits are neither great nor excessive, but rather moderate or minor; also unforgivable by stating that the borrower is rich; or even by stating that the borrowed money is not left idle, but is spent with useful...
Other contexts
Riba in literature
In The Divine Comedy Dante puts the users in the circle in the seventh circle of hell.
The interest on loans, and the contrasting views on the morality of practices held by Jews and Christians, is at the core of the plot of Shakespeare's drama "The Merchant of Venice". Antonio is a merchant of a degree, a Christian, who is forced by circumstances to borrow money from Shylock, a Jew. Shylock usually wears interest on loans, sees it as a good business, while Antonio does not, seeing it as morally wrong. When Antonio defaults on his loan, Shylock famously demands an agreed-upon quantity of muscle-measured quantities from Antonio's chest. This is the source of the phrase "one pound of meat" which is often used to describe the price of a lover of a loan or a business transaction. Shakespeare's game is a real portrait of borrowing views and the use of competing interest, as well as cultural disputes between Jews and Christians that overlap with it.
In the 18th century, usury was more often treated as a metaphor than the evil itself, so Jeremy Bentham Defense of Usury is not surprising as it would appear two centuries earlier.
In the novel HonorÃÆ'Â © de Balzac in 1830, Gobseck , the character of the title, who was a appellist, described as "petty and superb - a goblin and philosopher..." Daniel Quilp's character in At the beginning of the 20th century, the anti-usury poetry Ezra Pound was not based solely on the moral injustice of interest payments but on the fact that excess capital is no longer aimed at artistic patronage, as it can now be used for capitalist business investment.
Riba law
Riba and law
"When money is lent on a contract to receive not only the principal amount, but also an increase by means of compensation for use, this increase is called interest by those who think is halal, and < i> usury by those who do not. "(William Blackstone Comments on English Law ).
United States
Riba law is a state law that sets the maximum legal interest rate on which a loan can be made. In the United States, the main legal force to regulate usury lies primarily with the states. Each US state has its own law that determines how much interest can be charged before it is considered usury or unlawful.
If the creditor bills above the legitimate interest rate, the court will not allow the lender to demand to recover the unlawfully high interest rate, and some states will apply all payments made on the debt to the principal balance. In some states, such as New York), the usury loan is canceled ab initio .
Making usury loans are often called loan sharks. The term is sometimes also applied to the practice of making consumer loans without a license in a jurisdiction that requires the lender to be licensed.
Federal regulations
At the federal level, Congress has never attempted to federally regulate interest rates on purely private transactions, but on the basis of previous US Supreme Court decisions, arguably the US Congress may have the power to do so under the inter-state trade clause of Article I of the Constitution.
Congress enacted federal criminal penalties for unlawful interest rates through the Law of the Racketeer Corruption Organization and Corruption (RICO Statute), and its definition of "unlawful debt", which makes it a potential federal crime to lend money at interest rates more than doubled the level of the usury of the local country and then tried to collect the debt.
It is a federal offense to use force or threats to collect interest on usury (or any other type).
Separate federal rules apply to most banks. US Supreme Court unanimously in case of 1978, Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. , that the National Banking Act of 1863 allows nationally hired banks to impose a legal interest rate in their country regardless of the borrowing country.
In 1980, Congress passed the Deregulation of the Institute of Storage and Monetary Control. Among the provisions of the Act, it excludes federal savings banks, installment of installment packages and leasing companies from the country's usury borders. Combined with the Marquette decision applicable to the National Bank, this effectively overrides all state and local legal laws. The 1968 Truth in the Refuting Act does not set the level, except for some mortgages, but requires a uniform disclosure or standard of fees and fees.
In the 1996 case Smiley v. Citibank , the Supreme Court further restricts the state's power to manage credit card fees and extend the reach of Marquette's decision. The court stated that the word "interest" used in the banking law of 1863 includes fees and, therefore, states can not regulate fees.
Some members of Congress have tried to enact a federal law of usury that will limit the maximum allowable interest rate, but the steps are not progressing. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama. The law provides the Consumer Financial Protection Bureau to regulate some credit practices but does not have interest rate limits.
Texas
State law in Texas also includes provisions for contracting, charging, or receiving fees exceeding twice the amount authorized (A/K/A "double usage"). A person who violates this provision is responsible to the obligor as an additional penalty for all principal or principal balance, as well as the difference in interest rates or time. A responsible person is also responsible for the reasonable attorney's fees incurred by the obligor.
Canada
The Canadian Criminal Code limits the interest rate to 60% per annum. The law is widely written and Canadian courts often intervene to remove ambiguity.
Japanese
Japan has various laws that limit interest rates. Under civil law, the maximum interest rate is between 15% and 20% per annum depending on the principal amount (larger amount has a lower maximum rate). Interest of more than 20% is subject to criminal penalty (maximum criminal law is 29.2% until decreased by law in 2010). The default interest on late payments can cost up to 1.46 times the usual maximum (ie, 21.9% to 29.2%), while the pawnshop may charge up to 9% per month (ie, 108% per annum, however, if the loan extends beyond the normal short-term mortgage loan, an elaborate 9% per annum interest rate can make an annual rate of over 180%, before then most of these transactions will result in scorched mortgaged goods).
Non-interest avoidance and lending mechanism
Islamic Banking
In a partnership or joint venture in which money is lent, the creditor only provides capital but is guaranteed a fixed amount of profit. However the debtor places time and effort, but is made to bear the risk of loss. Muslim scholars argue that such practices are unfair. As an alternative to usury, Islam strongly encourages charity and direct investment in which the creditor shares whatever profit or loss may arise in business (in modern terms, this means equity shares in the business).
non-recourse mortgages
Non-recourse loans are secured by the value of the property (usually real estate) owned by the debtor. However, unlike other loans, which require the borrower to repay the loan amount, the non-recourse loan is fully met only by the transfer of property to the creditor, even if the property has decreased in value and is worth less than that amount. borrowed. When such a loan is made, the creditor bears the risk that the property will decline sharply in value (in which case the creditor is paid with the property value less than the amount borrowed), and the debtor does not assume the risk of impairment of the value property (since the debtor is guaranteed the right to use the property, regardless of its value, to meet the debt.)
Interest-free Bank
JAK member banks are a system of interest-free savings and lending.
Unsubscribed micro loan
The growth of the Internet internationally has made it possible for micro businesses to extend credit through sites such as Kickstarter as well as through global micro-lending charities where lenders generate small amounts of money available with zero interest rates. The person who lends money to an online microfinance charity, Kiva, for example, gets no pay, even if the end user to whom the loan is made may be charged interest by Kiva's partner in the country where the loan is used.
See also
- Abomination (the Bible)
- Chrematistics
- Christian Finance
- Contractum trinius
- Greed
- Sharia Banking
- Loans and interest in Judaism
- Loansharking (traditional Mafiosi occupation)
- Money changed
- Payday loans
- Loan predators
- Loan title
- Riba 1660 Act
- Riba
- Vix pervenit
References
Further reading
- 'In Restraint of Usury: Loans of Interest with Interest Interest', Sir Harry Page, The Chartered Institute of Public Finance and Accounts, London, 1985,
- The bibliography in it - specifically:
- 'The Idea of ​​Riba: from the Siblical Brotherhood to Other Others', Benjamin Nelson, Second Edition, University of Chicago Press, Chicago and London, 1949, second enlarged edition, 1969.
- 'Interest and Free Money Inflation: Creating a Working Exchange Media for Everyone and Protecting the Earth', Margrit Kennedy, with Declan Kennedy: Illustrated by Helmut Creutz; New and Expanded Editions, New Society Publishers, Philadelphia, PA, USA, and Gabriola Island, BC, Canada, 1995.
External links
- History of Riba from America for Justice in Lending
- Riba and the Church of England
- Riba is a Riba in Islam, this is the exclusive site on the subject of Riba (ar-Riba, usury, interest), answers the logic and reason for the prohibition of usury
- USURY, Biblical View, Ethics and Economics, by Calvin Elliott, 1902. (facsimile traceable at Georgia University Library; DjVu & amp; layered PDF format)
- The Catholic Encyclopedia article on Usury, 1912
- Question 78. The Sin of Riba (St. Thomas Aquinas' Summa TheologiÃÆ'Â| )
- Luther's sermon on Trade and Riba
- Concordia Cyclopedia : Riba
- What Is This Love? A Release from Economic Calvinism
- Dr. Ian Hodge on Usury
- S.C. Mooney's response to Dr. Gary North against Usury: Destroyer of Nations
- Norman Jones's article on usury from the EH.NET Encyclopedia
- The Islamic definition of Riba
- The law of usury by state.
- History of Religious Offenses against Usage
- The Origin of Modern Banking and Riba in the UK
- Buddha of Right Livelihood and Riba
- Riba (Jewish Encyclopedia, 1906 ed.)
- Riba (Out of Pale Exposure, friends-partners.org)
- The defense of Riba by Jeremy Bentham. 1787
- About Riba by Francis Bacon
- Thomas Geoghegan on "Unlimited Debt: How Interest Rates Endlessly Destroys the Economy"
Source of the article : Wikipedia
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