The next and final step in the liberalization of interest was taken by Thomas De Vio, Cardinal Cajetan (1468-1534). He was the leading Catholic theologian of his day, a favorite of the Pope, and a defender of Catholicism against Martin Luther. His writings represented the most sophisticated of his time as regards economics. He completely endorsed Summenhart’s teaching and took it a step further to say that any loan contract was legitimate if both the borrower and the lender agreed to it in anticipation of some economic benefit. He carefully took apart St. Thomas’s own writings on the topic and demonstrated that it was perfectly just for the lender who is giving up use of his property to charge a service fee in exchange.
Since those times, there has been no real debate in the Church on this question. Yes, usury continues to be warned against, though no one makes the attempt any more to distinguish between interest and usury. They were once considered synonymous; today they are distinguished as a reflection of a continuing bias against lenders who would seem to display more avarice than charity in their work. But in practice, there is no clear difference. What’s more, even seemingly usurious loan rates serve a social function: the higher the rate of interest, the more saving is encouraged and borrowing discouraged.