Legal Definitions - defeneration

Defeneration refers to the historical act of lending money at an excessively high or illegal interest rate, a practice commonly known as usury. Throughout various periods and cultures, legal and religious doctrines often prohibited or severely restricted the amount of interest that could be charged on a loan, deeming rates above these limits exploitative and unlawful.

• Example 1: In 14th-century England, a local lord, in desperate need of funds to repair his castle after a siege, borrows a significant sum from a wealthy merchant. The merchant, aware of the lord's urgent situation and limited options, charges an annual interest rate of 40%, far exceeding the customary and legally tolerated rates of the era.

  Explanation: This scenario illustrates defeneration because the merchant is engaging in the act of lending money at a usurious interest rate, taking advantage of the lord's immediate financial distress and violating the period's norms against excessive interest.

• Example 2: During the Roman Republic, a patrician family, facing temporary financial hardship, seeks a loan from a prominent moneylender. The moneylender agrees but demands an interest rate that significantly surpasses the maximum rate permitted by Roman law, which was designed to prevent the exploitation of debtors.

  Explanation: Here, the moneylender's actions constitute defeneration, as they are providing a loan at an interest rate that is considered illegal and exploitative under the prevailing legal framework of the time.

• Example 3: Imagine a small European principality in the 17th century where the reigning duke has issued an edict capping all loan interest rates at 12% per annum. A clandestine lender, operating outside the duke's authority, offers loans to impoverished farmers at 30% interest, knowing they have no other recourse for credit.

  Explanation: This is an example of defeneration because the clandestine lender is knowingly providing loans at an interest rate that is explicitly forbidden and deemed usurious by the principality's legal decree.