Joe Biden and Usury

News: Campaign 2020Commentary
by Dr. John Lamont  •  •  November 30, 2020   

Former VP's stance violates historical Church teaching

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Much has been said about the contradiction between Joe Biden's total support of unlimited abortion and his profession of Catholicism. There is another contradiction between Biden's political positions and his posturing as a faithful Catholic — a contradiction that runs through his whole political career. It has gone largely unnoticed, but it is important both in itself and for the light it casts on politics. This is Biden's consistent support for usury and the people and organizations that benefit from it.

DuPont Chemicals Company

Biden's Political Career

Biden has been a senator for Delaware since 1973. This small state was once dependent on the giant chemical firm DuPont. Lesser scions of the DuPont family were given the job of serving as governor of the state.

The deindustrialization of America led Delaware to look for other sources of revenue. It found them by making itself (even more) attractive as a location for corporations. Corporations incorporated in Delaware can operate anywhere in the United States.

By virtue of their Delaware location, they benefit from the absence of many fees and taxes on their operations that are levied in the rest of the country. Owners, shareholders and managers of private firms headquartered in the state are granted anonymity by Delaware law. The state has a special court, the Court of Chancery, that deals with business disputes. It can be relied upon to rule in favor of corporate interests. More than half of publicly traded American companies are incorporated in the state. As a result, incorporation fees are the second-largest source of the state's revenue.

Financial institutions are especially well represented in Delaware because of the state's rejection of usury laws. These laws limit the rates of interest that can be charged to borrowers. In the United States, states have the power to regulate interest rates, and most of them set a cap on the interest that can be charged by credit card companies and other lenders.

This is Biden's consistent support for usury and the people and organizations that benefit from it.

Delaware has no limits on the rate of interest. As a result of the Supreme Court's decision in the case of Marquette National Bank v. First of Omaha Corp. in 1978, state anti-usury laws cannot be enforced against nationally chartered financial institutions headquartered in other states. These laws are thus a dead letter for credit card companies headquartered in Delaware and operating in the rest of the country.

Joe Biden has unconditionally supported these financial institutions and provided vital support for laws that give them more power over their creditors. He opposed laws that would shorten the window in which credit card companies could collect debt from their debitors. He voted for the repeal of the 1933 Glass-Steagall Act in 1999. This act had made it illegal for commercial banks to participate in investment banking and vice versa. It had been passed because this participation had been an important cause of the 1929 stock market crash that led to the Great Depression. Its repeal contributed to the global financial crisis of 2008.

Biden was particularly active in supporting the credit card company MBNA, which hired his son Hunter. This innovative company paid millions of dollars to universities and sports teams to get access to their database of members. It then sent out huge numbers of credit card applications. If any of its credit card holders made all their card payments but missed a payment on other debts — such as a car payment — MBNA would raise their interest payments anyway. Its business model was based on getting customers to default on debt.

This business was impeded if credit card holders went bankrupt. Truthfully stating, "Creditors are not people I am crazy about," Biden helped to solve this problem for the credit card companies by playing an essential role in "bankruptcy reform." This "reform" was legislation that made it far harder for individuals to declare bankruptcy. It also removed student loans as a debt that could be discharged by bankruptcy.

Biden took a different tack with corporate bankruptcy. He ensured the defeat of legislation that would force companies to declare bankruptcy in the states in which they actually operated. As a result, corporations incorporated in Delaware remained free to declare bankruptcy in that state, where the bankruptcy process is much cheaper and more favorable for them; corporations that file for bankruptcy in Delaware are much more likely to survive.

Hilaire Belloc

Catholic Teaching on Usury

The teachings of the Faith on usury need to be explained as they are now almost entirely unknown. Usury, in Catholic thought, is not the charging of excessive interest on a loan. It is the charging of interest on a loan of money or things on the mere strength of the loan.

"Mere" is the essential term here. If a lender incurs some actual loss from the making of the loan, over and above the deprival of the thing that is loaned, he may justly seek compensation for this loss. If the borrower receives some value from the thing borrowed that is over and above the value of the thing itself, the lender may at least in some circumstances justly seek remuneration for that additional value. If neither of these situations obtain, charging interest on a loan is usury.

The Fathers and Doctors of the Church have given conclusive philosophical arguments for the immorality of usury — arguments that anticipate the points made by its defenders up to the present. Catholic thinkers like Hilaire Belloc and Elizabeth Anscombe have pointed out the evils that usury causes. If the rate of interest on loans exceeds the rate of economic growth, usury will mean that the owners of capital will acquire a steadily increasing proportion of the wealth of society at the expense of poorer borrowers. Since usury competes with productive activity for investment, it will depress economic growth. These tendencies snowball as borrowers become poorer and more in need of funds.

The Church has, however, always appealed primarily to divine revelation as the grounds for Her denunciation of usury as a serious sin.

Biden's work for credit card companies is formal cooperation in usury of the clearest and worst sort.

Deuteronomy 23:19–20 forbids charging interest on a loan: "Thou shalt not lend to thy brother money to usury, nor corn, nor any other thing." Ezekiel 22:25 and Leviticus 25:35–37 agree. The permission in Deuteronomy to charge interest to non-Jews is not understood by the Church as an exception to the immorality of usury, but rather as toleration of evil. The ecumenical Council of Vienne in 1311 definitively taught that "if indeed someone has fallen into the error of presuming to affirm pertinaciously that the practice of usury is not sinful, we decree that he is to be punished as a heretic."

The first important figure in Europe to argue that moderate usury was morally permissible was John Calvin. In the face of attacks on the traditional doctrine, Pope Benedict XIV firmly repeated the absolute condemnation of usury in his encyclical Vix Pervenit in 1745. The enforcement of this condemnation was abandoned by the Church in the 19th century in a series of 'pastoral' accommodations that seem oddly familiar today, but the condemnation has not lost its truth — or its relevance.

Biden and Usury

Biden's work for credit card companies is formal cooperation in usury of the clearest and worst sort. The prophet Ezekiel connects usury with idolatry, murder, sexual immorality, robbery and oppression of the poor (Ezekiel 18:10–13). Biden's support for usury and abortion is thus revealed by the prophet as forming part of a connected whole. This connection says something important about the political, cultural and financial complex that Biden represents and serves.

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