I. Philosophical Roots – Why Spain is Different

1. Aristotelian-Thomistic ban: Money is sterile
Canon law, following Aristotle, defined usury as anything beyond the exact original amount as heresy. Interest was unnatural because money does not breed money.

2. School of Salamanca – The Spanish breakthrough that invented modern economics

Dominicans and Jesuits at University of Salamanca – Francisco de Vitoria, Domingo de Soto, Martín de Azpilcueta – had to answer: Can Spain lend to finance empire and trade with Indies?

Francisco de Vitoria (1483-1546): Loan with interest, although not in agreement with will of debtor, can be legitimate for example due to risk.

Domingo de Soto (1494-1560): Founder of international law. Defended price differential in usury as compatible with just price. Complained merchants invented convoluted schemes to meet confession. In De Justitia et Jure (1553-56) he introduces extrinsic titles that make interest licit:

• Lucrum cessans – profit ceasing (lender loses alternative investment)
• Damnum emergens – emerging damage
• Periculum sortis – risk of losing principal

Martín de Azpilcueta, Doctor Navarrus (1492-1586): In Comentario resolutorio de usuras (1556) appendix to Manual de confesores, defines: Usura, o logro ilícito, es ganancia estimable de su naturaleza a dinero... but then revives time-preference theory: interest represents time value of money. He is credited by historians of economic thought as discovering time-preference – a euro today worth more than euro tomorrow. Yet he condemned usury in general during his whole life – showing tension between economics and ethics.

Leonard Lessius (Jesuit influenced by Salamanca): Introduced carentia pecuniae – lack of money – interest compensates lender's lack of liquidity.

Philosophical legacy: Spanish scholastics argued interest is NOT intrinsically evil if it reflects real economic loss/time/risk. That moves from natural law case against usury to institutional/economic case for just interest. This is exactly the debate codified later in Ley Azcárate.

II. The Spanish Legal Formulation – Ley de Represión de la Usura 1908

Ley Azcárate, 23 July 1908 – still in force, one article governs all lending:

Art 1: Shall be null any loan contract that stipulates an interest notably higher than the normal rate of money and manifestly disproportionate to the circumstances of the case or in such conditions that it is leonine, there being reasons to believe that it has been accepted by the borrower due to his distressing situation, his inexperience or his limited mental faculties.

Three elements – this is ethical test:

1. Objective: interest notably higher than normal money
2. Moral proportionality: manifestly disproportionate to circumstances
3. Subjective vulnerability: distress, inexperience, limited faculties – i.e., exploitation

No fixed rate. Judge must decide what is "normal money" from Banco de España statistics.

Consequence of usury: Absolute nullity – borrower returns only principal, zero interest, all interest paid is refunded.

III. Modern Case Law – The Revolving Credit War

The philosophical debate became litigation tsunami with revolving cards – credit that renews, never amortizes, snowball effect.

1. Foundational – STS 628/2015, 25 Nov 2015 (Pleno) – Roj STS 4810/2015

• Contract 2001, TAE 24%. BdE average for consumer credit ~ 8-9%.
• Supreme Court creates jurisprudence: To apply Ley Azcárate to revolving, compare to normal rate for this specific product category (TEDR – Tipo Efectivo Definición Restringida).
• Interest considerably higher and manifestly disproportionate = usurious.
• Effect: borrower must return money received without any interest.

This re-opened 1908 law.

2. Wizink cases – What is "normal"?

• STS 4 March 2020 (Wizink): TAE 27.24% declared usurious.
• STS 367/2022, 4 May 2022 ECLI:ES:TS:2022:1763: TAE 24.5% NOT usurious, because 2014 average for revolving was 21.17% per BdE – differential only ∼3 points, not notably higher. Shows tension.

3. The 2023 Doctrine – Objectivization of ethics

Plenary finally settles differential:

STS 258/2023, 15 Feb 2023 Roj STS 442/2023 + STS 317/2023, 28 Feb 2023 + STS 1492/2023, 27 Oct 2023

Established objective criteria now taught in all Spanish banking law:

A revolving credit contract is usurious when its APR is equal or higher than sum of:
(i) average revolving credit card interest rate on date contract concluded (per Banco de España Statistical Bulletin)
(ii) plus 20 or 30 hundredths
(iii) plus six percentage points

Example: If average is 20%, usury threshold = 20% + 0.30% + 6% = 26.30%.

If TAE >= threshold → usury. This 6-point rule is ethical translation of Salamanca's lucrum cessans + periculum – bank has higher risk/cost for revolving, so deserves 6% margin, but beyond that is exploitation of inexperience.

4. Extension beyond revolving

• STS 257/2023, 15 Feb 2023: Determination of usurious character of mortgage loan where lender is NOT credit institution (private lenders). Cannot compare to mortgage operations average – must compare to private lending market. Shows moral element persists.
• STS 154 and 155/2025, 30 Jan 2025 Roj STS 242/2025, 241/2025: Transparency control in revolving. Even if not usurious, clause can be abusive if transparency fails – violation of good faith competition ethics from previous topic.

IV. Philosophical Debate Today

Spain currently debates three positions, mirroring Salamanca:

A. Deontological / Consumerist: Any interest exploiting vulnerability is immoral, even if market accepts it. Represented by consumer associations ADICAE, and STS 628/2015 logic. Argues revolving cards target inexperienced borrowers – matches Art 1 Ley Azcárate subjective element.

B. Consequentialist / Economic liberal: Interest is price of time and risk. If borrower freely consents and market average is high due to default risk, high rate is just. Represented by banks and BdE statistics argument in STS 367/2022.

C. Virtue ethics / Aristotelian – Middle path adopted by Tribunal Supremo since 2023: Interest is licit within just price (Soto/Azpilcueta). The 6-point margin operationalizes extrinsic titles: compensates for risk and lack of money, but cap prevents leonine exploitation. Transparency requirement adds that borrower must understand snowball effect.

This is why Spanish banking ethics of interest is not just about numbers: Judge must ask Salamanca questions – Was there damnum emergens for bank? Was borrower in distress? Was time-preference explained?

For exam, cite:

• Salamanca: Domingo de Soto De Justitia et Jure on extrinsic titles; Azpilcueta Comentario resolutorio de usuras on time-preference
• Statute: Ley Azcárate 1908 Art 1
• Case: STS 628/2015 (doctrine creation), STS 258/2023 + 317/2023 (6-point rule), STS 367/2022 (limit), STS 257/2023 (private lenders)