How is selling the use of a house not usury but selling the use of wine, separately from the wine, is?

According to the Bible, usury (charging interest) is not a sin unless one requires this of a fellow believer (fellow Israelite).

If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury. (Exodus 22:25, KJV)

³⁶ Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. ³⁷ Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase. (Exodus 25:36-37, KJV)

Notice the words "my people" and "thy brother." Compare those passages with the following that expands the message to others.

¹⁹ Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: ²⁰ Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it. (Deuteronomy 23:19-20, KJV)

A little thought might suffice to understand the reason usury is allowed for the stranger. All that a believer owns is understood to belong to God, and the believer is just a steward of his Lord's resources. Lending to a stranger means those resources are, for the time, tied up, and are not directly prospering the Lord's work. The primary recompense for this loss is in the usury received back later, which can then be invested in God's work. A secondary recompense might come in the form of the witness, with respect to kindness in lending, that may attract the unbeliever to a knowledge of God. Beyond these goals, however, there is little benefit to lending to an unbeliever (a stranger); and the enemies of God would like very much to occupy all the Lord's resources.

Aquinas' logic is a bit convoluted. I understand what he is saying, but I disagree with it. He is essentially saying that for a consumable, to lend it is to give it, because it will be consumed. To ask for an equal measure back is the only way in which it could be lent. But to ask for double back is to require that which was not given--and to his mind, this is unjust.

I disagree, however, because when one goes without for a period of time, one loses the benefit that might have been conferred by the thing lent for that time, and the usury would be to cover this loss. Consider the rationale for demanding at the law reparations for "loss of consortium." Even being deprived for a period of time can result in tangible effects. Thus it is with lending--during the period something or someone is lent, the lender is deprived of that which is lent, and usury is the price for that.

An interesting question would be whether or not Aquinas intends to be addressing believers only, or everyone. In any case, Biblically speaking, there is a difference between charging believers or unbelievers.

Catholic legal professor and usury expert Brian McCall describes the difference between

1. goods consumed/destroyed in their first use

and

2. goods whose use does not result in their destruction,

in To Build the City of God: Living as Catholics in a Secular Age (2017), ch. 4 "The Details of Economics: Money, Debt, Just Price, and Usury", § "Usury: What Is It? How Do We Avoid It? Why Do Our Shepherds Ignore It?":

To discern what Scripture and Tradition have taught, we need to define some terms. This is somewhat tedious but necessary in this complicated area. To begin, we will start with some statements from the last major papal document that focused exclusively on usury, Vix Pervenit [Latin] of Benedict XIV [in 1745]. The pope writes, "The nature of the sin called usury has its proper place and origin in a loan [mutuum] contract." [Peccati genus illud, quod usura vocatur, quodque in contractu mutui propriam suam sedem et locum habet] He continues, "any gain which exceeds the amount he [the lender] gave is illicit and usurious." [Omne propterea hujusmodi lucrum, quod sortem superet, illicitum, et usurarium est.] The two highlighted terms are critical to this summary of the doctrine. If a particular transaction is not a loan, then any gain cannot be usury (although it may be licit or illicit as a result of a moral principal other than usury, as when, for example, a merchant sells a product for more than its just price). Secondly, only "gain" is usury. We need to examine carefully what these two terms signify.

In modern law and speech, the word "loan" has a broad meaning. It can be used to describe when a person gives money to another to buy food or medical care and expects repayment of that money at another date. It can refer to an investor who provides capital to a business for a time and expects the return of his capital and a profit. Further, it can describe when a person gives another a piece of property (like a car) to be used for a while and requires the return of that same property. The Roman law had distinct terms to identify all of these transactions, which are now signified by our word "loan." Since most of the examples of the infallible teaching of the Church on usury use these Roman law terms, we need to understand that the law of usury only applied to those situations designated by the Roman word for "loan" (mutuum) and not the modern term.

The mutuum involved the transfer of ownership of a fungible good that was consumed in first use and required that the borrower return at a later time property of the same kind and quantity provided to him. This definition only covers the first example we cited above. The other examples were identified by other terms, such as societas, census commodatum, and conductio locatio re. One could not commit usury when engaging in these other transactions (again, other sins were possible but not usury).

Before progressing, we need to understand the concept of "consumed in first use." The mutuum only applied to the transfer and retransfer of this type of property. It is something that cannot be used without its destruction or loss. Tangible property can be divided into three groups of things: (1) those that can be used without their total loss, (2) those that can only be used by their total loss, and (3) those things which have different possible uses, some of which consume the thing and some of which do not. A house can be lived in and not destroyed. Wine cannot be used (for drinking or cooking) without consuming it. A potato can be used without consuming it (for example, by planting it as a seed potato) or by consuming it (eating it). From about 325 through the fourteenth century, money was thought to be exclusively or almost always in the second category of things that are consumed in first use. Due to the expansion of commerce, more opportunities to use money in a productive way (like the seed potato) became common. Many theologians began to consider whether money was actually in the third category of things that can be used in first use or used productively. Money could be used without consuming it completely (like planting a seed potato to grow more potatoes).

The next important concept in the pope's statement is "gain." The sin of usury occurs when a lender of a fungible thing consumed in first use requires that he be put in a better position than he was in before the loan. It is licit to require equality in position. Now we must distinguish gain from compensation for a loss. If a man steals my car and crashes it, he then is obligated to give me a new car of similar quality in restitution. I do not gain; I merely return to my original position. The Roman law called the payment to compensate for loss quod interest or the "difference." The original meaning of our word "interest" was not payment of gain for a loan but payment in compensation for a loss. For example, Marcus borrows 100 ducats from Linus and promises to pay it back in two months. Linus needs the money back in two months to pay his son's tuition at the university. Linus pays the money back two months late, and as a result Linus has to pay a ten ducat fine for paying tuition late. Marcus should pay Linus ten ducats in "interest" to compensate him for that loss. This payment is not usury, as it is not a payment for the use (consummation of money) but merely compensation for the harm done by not returning the money when agreed.

See also his talk "The Principal and Gross Injustice of Usury".

St. Thomas Aquinas gets of a lot of things right, but on this matter I believe he is simply incorrect.

His argument has two parts. First, it is only okay to charge for the use of something when ownership can be separated from the use, such as with renting a house. If something is consumed (destroyed) by the use, then the ownership cannot be separated, and therefore it's not okay to charge for the use separately from the thing; you'd be double-dipping, and that's not good.

I don't necessarily disagree with that idea. I'm not fully convinced of it, either, but I'd love to see the principal applied to certain software licensing regimes, for example.

I also want to point out this doesn't strictly eliminate money-lending as a potential business venture. It would be okay under this rule to, say, lend $100 in exchange for receiving $110 when the loan is repaid (the balance plus $10 in reasonable profit). What this principal says is the charge for a monetary loan should be fixed up front, rather than grow the longer the loan (use) lasts.

But there is still the second part of the argument (money is consumed in the use), and here is where I need to pose a question: which type of thing is money, really?

Let's say I take small loan to buy food: say I visit a restaurant and pay by credit card. Clearly the money the was consumed by the purchase, and very soon so is the food. It seems like Mr Aquinas is right. But what if I take a larger loan to start a business? The business is still there after I spend the money, and (hopefully) very soon so is the money.

Economically, we say money is fungible: that is, it is easily converted from one thing to another. There are many things one can purchase with money that are also durable and themselves (perhaps somewhat less) fungible. So I can take a loan to purchase (or rent) a thing in order to perform some service, then sell the thing to get the money back, and return the "same" money to lender.

That is, money can be consumed from the use, but it is not certain to be.

Now lets go back to restaurant example, and add another wrinkle. Let's say my bank balance is $0; I have no money of my own at this particular moment. However, I do have a steady job and am expecting a paycheck tomorrow, and we'll also say my current broke state is for expected reasons that don't particularly concern me.

This helps us look at the nature of this small credit card loan in terms of a time shift, as well. Even for this most ephemeral use of the money, I still only need or want it for a particular moment in time, and then I return it, perhaps as soon as the next day. Even here, we see the loan was ultimately about use over time, rather than consumption.

The nature of any loan, then, is the borrower must return to the lender the full the value of what was borrowed, and on top of this the lender may reasonably charge a fee for the use of the borrowed money, to make it worth his effort and inconvenience. The longer the duration of the loan, the longer the lender is deprived of the use of the money himself (to make other loans, for example), and therefore it is justifiable this fee can also be time-based.

Where we should take exception is with EXCESSIVE usuary.

For fun, let's further look at a basic idea for limiting excessive usury.

What if we had legal limits in place to prevent finance charges beyond the value of the initial principal of any loan? The moment interest and fees have reach the value of the original principal, any outstanding balance is still owed, but the lender no longer has the ability to tack on additional charges.

This seems like a great baseline protection for borrowers. It might even still allow excessive usury, but as a final backstop it's better than nothing.

But now let's think deeper. How does one arrive at this situation? Either you agreed to (and signed for) a loan with excessive usury built in, or you failed at some point to meet your repayment obligations for the original loan, allowing the use fees (interested) to pile up. At this point, the lender could reasonably argue you are extending the loan to use periods, which justify new charges.

I think doubling over the original principal is still excessive, but at some point holding onto the balance is depriving the lender of their property, and there needs to be a penalty. Perhaps a better idea is that at this point interest can no longer compound.