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Pope Francis And Wall Street

Pope Francis And Wall Street by Jim Lardner, Americans for Financial Reform

With Pope Francis’s visit, millions of Americans will get to hear a passionate message of concern for the poor and the natural environment. What may come as more of a surprise to some are Francis’s strong convictions about the need for new rules to govern the world of banking and finance.

Two years ago, in the first major statement of his papacy, he declared that “no solution will be found for the world’s problems” until we reject “the absolute autonomy of markets and financial speculation,” and say “no to a financial system which rules rather than serves.”

This year, in his Encyclical on the environment, he condemned the way governments responded to the 2008 financial crisis. “Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system,” the Pope said, “only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises after a slow, costly and only apparent recovery.” The crisis, he added, should have been treated as “an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth.”

When Francis addresses Congress Thursday morning, he will be speaking to a body in which many members are trying to roll back the reforms of the Dodd-Frank Act, while some have even talked about attaching Wall Street giveaways to “must-pass” funding bills, hoping to get them passed with little or no debate, under the threat of a government shutdown.

Usury could be another uncomfortable topic for some lawmakers. Catholicism, like most of the world’s great religions, regards it as a sin. But in the deregulatory fervor of the 1980s, the U.S. largely jettisoned its usury laws, setting the stage for the rise of an industry of payday and other triple-digit-interest consumer lenders, who now operate with little legal restraint in more than half the 50 states.

Within the next six months, the Consumer Financial Protection Bureau is expected to come out with a proposal to regulate these lenders, requiring them, for example, to verify a borrower’s ability to repay a loan before the loan is issued. Here, once again, many members of Congress are actively working to block the Bureau’s efforts and give this kind of lending a new lease on life.

But on Thursday, they will listen to a Pope who, during one of his general audiences in St. Peter’s Square last year, described usury as a "dramatic social wound" that "offends the inviolable dignity of the person… When a family has nothing to eat because it has to make payments to usurers,” he added, “this isn’t Christian, it is not human!”
Here is a sampling of Pope Francis’s statements about banking and lending:

From the Apostolic Exhortation Evangelii Gaudium of November 24, 2013

Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people...