Usury is the practice of lending money at interest rates considered unreasonably high or in excess of those permitted by law. Historically, the definition has shifted: in ancient times, any charging of interest was considered usurious, while in later periods it came to mean only exorbitant or unjustly high interest12.
Usury’s history spans over four millennia, with references as early as 2000–1400 BCE in religious manuscripts from India. Ancient Hindu and Buddhist teachings associated usury with social disrepute and banned certain high-caste groups from money-lending. In Ancient Greece, Aristotle condemned moneylending for profit as unnatural and dishonorable, ideas that influenced how later cultures viewed lending34.
During the medieval period, both Christianity and Islam denounced usury. The Christian Church, drawing from biblical passages, forbade Christians from charging interest, designating it as a mortal sin. Canon law applied only to Christians, which created a gap that others, notably Jews, would fill in economic life. Similarly, Islam prohibited usury (riba), considering it a crime against moral and religious order345.
Despite religious prohibitions, societal changes pushed the practice forward. With the rise of long-distance trade and capitalism in the West, usury was gradually normalized. By the late Middle Ages and early modern period, bans on interest were lifted in many places as the need for credit outgrew religious restrictions4.
Throughout much of the Middle Ages in Christian Europe, Jews were legally barred from many trades, owning land, or joining guilds. However, because canon law's prohibitions only applied to Christians, Jews were legally permitted to lend money with interest to non-Jews. This regulatory gap, combined with demand for credit and frequent tax burdens placed on Jewish communities, led many Jews to become moneylenders678.
Jewish moneylenders provided financial services to both peasants and the nobility.
Women, too, were often active: in 13th-century England, Jewish women such as Licoricia of Winchester became prominent financiers9.
The economic niche proved both lucrative and perilous. While some, like Aaron of Lincoln, amassed significant fortunes, moneylending also exposed Jews to resentment, violence, and repeated expulsions.
Profits from moneylending could be considerable, but the risk was equally high due to both anti-Jewish sentiment and volatile political climates68.
By Elizabethan times, usury remained a matter of public concern and debate. Writers like Shakespeare explored its moral and social implications; "The Merchant of Venice," for example, dramatizes the complicated relationships between Christian and Jewish moneylenders10. By then, however, London’s economic expansion required more organized credit markets. Merchants, traders, and, increasingly, Christian bankers played growing roles in moneylending, encouraged by the Crown’s willingness to tolerate moderate interest rates.
Loansharking—illicit moneylending by organized crime—is notorious for exorbitant interest rates and harsh enforcement tactics. Typical "street rates" can range from 5% to 20% per week, which, if annualized, results in ruinous rates of 260–1,040% or more, far exceeding legal limits in most countries. Failure to repay can result in threats, violence, or worse. Precise rates can fluctuate based on local conditions and the power of criminal organizations; however, the central feature remains extremely high, compounding interest11.
Modern regulated short-term lenders (such as payday loans) often charge a fee of $10–30 per $100 borrowed over two weeks, which can equate to an annual percentage rate (APR) of nearly 400%—not far off from illegal usury rates11.
Credit card issuers and legitimate lenders levy lower, but sometimes still significant, fees:
| Lender Type | Typical Interest / Fee Range |
|---|---|
| Credit Card Processing | 1.5%–3.5% per transaction1213 |
| Credit Card APR (US) | 15%–30%+ (annualized; varies)1213 |
| Loan Origination Fees | 1%–10% of loan amount (varies)14 |
| Payday Loans | $15 per $100 borrowed (≈400% APR)11 |
| Mafia/Loansharks | 5%–20% per week (260%–1,040%+ APR)11 |
Legal restrictions prevented Jews from owning land or joining most trades; moneylending filled an economic niche left open by Christian prohibitions on usury671516.
Moneylending often offered higher profit margins, which helped Jewish communities survive epidemics of punitive taxation.
The Church's restrictions inadvertently created a near-monopoly for Jews in this field, fueling both their economic importance and societal resentment78.
Not all lenders were wealthy elite: many operated at a small scale, and the stereotype of a "Jewish financier class" is exaggerated. Some did amass significant fortunes and held influence at court—most notably, Aaron of Lincoln, Josce of Gloucester, and later families like the Rothschilds pushed moneylending into mainstream European banking67.
Accumulation of wealth sometimes allowed for social mobility and patronage, but also bred suspicion and periodic violence targeting Jewish communities69.
The stigma around usury faded in most Western societies as economic necessity and growth demanded new credit systems. What was once sin and crime became regulated business. Today, various laws cap interest rates, and the term "usury" is reserved for grossly excessive or predatory lending—a reminder of usury's fraught legacy412.
Usury’s journey reflects deep tensions between moral ideals, economic necessity, and social prejudice. Its history includes both legitimate banking and exploitative practices—from religious condemnation, through medieval and Elizabethan innovation, to modern debates about credit and fairness. The Jewish role, far from simple or monolithic, was shaped by historical circumstance, necessity, and society’s often ambivalent reliance on moneylenders697816.