Usury is defined as "the practice of lending money and charging the borrower interest, especially at an exhorbitant or illegally high rate" (American Heritage Dictionary). Calling a practice "legal usury" may seem like an oxymoron because most definitions emphasize illegality, but it is worth noting that this first definition defines usury as involving an exhorbitant OR illegally high rate.  Since the advent of the credit card culture, banks have gotten away with legally charging exhorbitant interest rates.  What was once considered to be the domain of unethical money-lenders who operated from the back rooms of establishments in the seedy part of town is now the principal business of billion-dollar institutions – giant conglomerates with offices on every main street in the land.

To get some idea of the magnitude of bank profits, consider these data.  In November of 2007 – a terrible month for banks – profits of 8,560 FDIC-insured banks dropped $9.4 billion to $28.7 billion, according to CNN (CNNMoney.com).  These profit figures are quarterly, so that means the normal quarterly profits of these banks collectively are in the ballpark of $38 billion.  Unless my math is faulty, that's around $4.5 million per bank on average each quarter.

Obviously, the banks are not hurting.  Even in a month when a massive collapse in the credit market occurred and bank profits dropped 25%, they were raking in massive profits.  Although, of course, some of these profits came from business investments, a good portion came from a single source – fees and interest charged on money loaned to individuals.  In other words, a huge portion of the largesse enjoyed by banks consists of what we pay them for managing the money we earn by working for it.

Most of us, including me, do not understand how banks work.  We put money in them and take money out.  Sometimes, if we leave money in a savings account for a long time, the banks condescend to give us a little interest.  With all this going on, banks obviously have a lot of our money to play around with – billions.  What do they do with it?  Clearly, it doesn't just sit there, for any fool knows that, if you've got billions of dollars, you use some of it for transactions, and you invest the rest.  So the banks, which don't do a lick of work except push paper around, use the money we earned to make money for themselves.  That's how it works, isn't it?

In return for our handing over our money, what do we get?  Now, granted, banks are entitled to something for keeping our money in a safe place, providing us with a convenient way to pay bills, giving us plush chairs to sit in while we wait for a financial advisor (i.e., bank clerk), and that sort of thing.  However, they have come to nickel-and-dime us to death with all sorts of charges.  They charge us to use ATMs, charge us for checks, and charge us to transfer money from one bank to another (even though such transactions are now done electronically and cost the bank no more than five minutes of someone's time).  They subtly convince us that what they're playing with is not our money but theirs.  It's a wonder they don't put their coffee in a vending machine and make us pay for that as well.

The most absurd charges are the overdraft charges.  Of course, banks need to discourage their customers from writing checks on funds that they do not have, but they've gone too far.  Almost everyone of modest means has bounced a check, either because of an error or a miscalculation in timing, which is always possible when, despite computerized accounting systems, a deposit can inexplicably take days to "clear the bank" before we can draw on the deposit.  When that happens, we can get a $25 to $50 charge for bouncing a $10 check.  Since banks deduct the charge instantly (even though it can take days to credit a deposit), we may find that we are overdrawn again – because of the overdraft charge.

For the bank, it's a win-win situation.  The overdraft has, in fact, cost them nothing; the charge for the overdraft is sheer profit.  For us, it's a no-win situation.

The biggest rip-off, however, is the whole credit card scam – and here is where the phrase "legal usury" comes into play.  The plastic cards that we carry in our wallets are unarmed bandits, quietly stealing from us and giving the proceeds to the bankers.  These little buggers are so profitable for the banks that they spend millions of dollars (our dollars, by the way) on advertising campaigns to get us to carry and use them.  VISA even has an ad in which someone who pays by cash is portrayed as a social outcast.
 
The card is the hook to catch the sucker, a ploy that would be the envy of the slickest snake-oil salesman of yore.  Some banks, after spending millions to persuade us to get one of their cards, have the audacity to charge us a fee for having it; others brag that they have no annual fee, which is their way of saying that they've figured out some more subtle way to bleed us dry.  All of them, of course, are required to disclose their interest rates, but the "disclosure" is presented in a form that would challenge a Ph.D. in mathematics.  Not one person in a thousand could tell you how much interest an unpaid balance $100 on his or her credit card would accrue in a year.  The banks don't want us to know.  If we did, many more of us would charge less and would pay off the full balance promptly every month.

That is decidedly not what the banks want us to do.  Every credit card bill comes with the "minimum monthly payment" prominently displayed.  Nowhere does it say (or if it says it, it's in the fine print that nobody reads) that this "minimum monthly payment" scarcely covers the interest that the bank is charging on the money we have borrowed.  The bank doesn't want us to fully repay the loan.  The bank wants us to ring up thousands of dollars of debt, keep paying exhorbitant interest on that borrowed money, and still owe the bank thousands of dollars.  Huge credit card debt, borne of people's falling for the "minimum monthly payment" scam is perhaps the single most common cause of many families' financial woes.

Much has been written about the irresponsibility and foolishness of living beyond our means.  There is some truth to that, but does the blame fall totally on the shoulders of the people who do so?  How much of it is a result of the deceptive practices that banks engage in to line their pockets and encourage us to go into debt?  Indeed, most of us calculate that we shall, in the very near future, have the means to pay for what we bought today on credit.  The interest on the money spent is what we can't afford, particularly if we listen to the banks' siren song about the minimum monthly payment.  The credit card, which began as a convenience, has been transformed by banks into a device for ensuring our continuous indebtedness and their continually rising profits.

We could go further and point out how the predatory nature of financial institutions (and their greed) negatively affects the entire economy, as in the recent economic meltdown in real estate and mortgages.  However, the overall economy is a complex matter and is beyond the privince of this article.  It is enough to point out that banks are, with utter impunity, ripping off the public – in good times and bad – by lending practices that guarantee obscene profits for them and huge debt for the rest of us.

We should be outraged.  We should be marching through the streets with pitchforks and demanding that the bankers be put into stocks (the wooden kind, not the Wall Street kind).  We won't, of course.  We have become so dependent on credit cards that we have become economic slaves, to endure legal usury by institutional money-lenders who are so addicted to obscene profits that they possess no ethics or morality.