Mount of piety

A mount of piety is an institutional pawnbroker run as a charity in Europe from Renaissance times until today. Similar institutions were established in the colonies of Catholic countries; the Mexican Nacional Monte de Piedad is still in operation. The institutions called Monte di Pietà originated in 15th-century Italy, where these institutions gave poor people access to loans with reasonable interest rates. It used funds from charitable donors as capital, and made loans to the poor so they could avoid going to exploitative lenders. Borrowers offered valuables as collateral, making the mount of piety more like a pawn shop than a bank. The concept of Mount of Piety was first developed in 15th-century Italian cities as an early form of organized charity, intended as a reform against money lending and the related sin of usury associated with Cahorsins and Lombards. It was primarily promoted by Franciscans such as Barnabas of Terni, Bernardine of Feltre, and Michele Carcano. The public office was organized and operated by the Catholic Church and offered financial loans at a moderate interest to those in need. The organizing principle, based on the benefit of the borrower and not the profit of the lender, was viewed as a benevolent alternative to the loans provided by moneylenders. The organization of the Monte di Pietà depended on acquiring a monte, a collection of funds from voluntary donations by financially privileged people who had no intentions of regaining their money. The people in need would then be able to come to the Monte di Pietà and give an item of value in exchange for a monetary loan. The term of the loan would last the course of a year and would only be worth about two-thirds of the borrower's item value. A pre-determined interest rate would be applied to the loan and these profits were used to pay the expenses of operating the Monte di Pietà. Over succeeding centuries such organizations spread throughout the continent of Western Europe, a credit to the preaching of Franciscans and their condemnation of usury, with later support by both Dominican preachers and humanist intellectuals of the fifteenth century.