The "fall" of the Roman Empire not only marked the end of a powerful geo-political entity of stability for most of Europe, but it also ushered in the demise of an economy that had dominated the continent for centuries. With the dawn of the "Dark Ages," Europeans of all stripes were forced to start from scratch and to establish new rules to govern the newly emerging political, social and economic practices that were emerging in the post-Roman world.
Among the many issues dealt with at this time was the practice of usury (interest practices on monetary loans). During the height of the Roman Empire, usury had been, by and large, an approved practice, though it was almost exclusively a privatized enterprise. Wealthy citizens could, if they so chose, grant loans with fixed interest rates (though the empire did, at times, place certain restrictions on those rates), thereby allowing a quasi-privatized banking system to arise. With the rise of the Catholic church in the early 4th century, however, the practice of usury was met with stern disapproval by early Christian leaders. For these early Christians, the teachings of Jesus, and of the Bible itself, made the practice of usury not only undesirable but downright sinful. From the Book of Deuteronomy:
19.) Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
20.) Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the Lord thy God may bless thee in all that thous settest thine hand to in the land...
This clear commandment against the practice of usury (with the exception given in bold for a "stranger," a loophole that Medieval Jews found quite useful) served as more than sufficient ammunition to criminalize the practice for the majority of the Middle Ages. The elimination of Usury was unanimously accepted during the 325 Council of Nicea. In the eighth century under Charlemagne, usury was, under the law, considered to be a general criminal offence. In 1179, at the Third Council of the Latean, anyone found benefiting from the practice of usury was prohibited from taking the sacraments and could eventually be excommunicated entirely. Later, Pope Sixtus V would call the practice of usury, "most detestable to God and man, damned by the sacred canons and contrary to Christian charity."
So, if the practice of usury was so deplorable to Medieval Christians, how did it eventually become standard operating procedure? And how are Christians today (along with capitalism in general) able to so gleefully support its continued existence?
The answer rests primarily with the rise of trade and (eventually) Mercantilism in Europe. As European society continued to progress through the Middle Ages, the growth of trade and finance forced change upon a society that was, for centuries, operating on a set of rules that issued divine punishment for certain practices (such as usury). But these divine punishments eventually had to give way to the sweeping tides of change.
Increasingly thereafter, and despite numerous subsequent prohibitions by Popes and civil legislators, loopholes in the law and contradictions in the Church's arguments were found and along with the growing tide of commercialization, the pro-usury counter-movement began to grow. Nobles and other elites of European society quickly discovered that the practice of usury was virtually a gold mine waiting to be tapped. As trade and commercialization began to spread its roots further out into the Middle East and the Orient, European powers saw greater opportunities to increase their wealth. Even holy religious orders like the famous Knights Templar got into the act by taking advantage of their complex network of members that were branched out all across the European countryside.
But not everyone was in favor of this new justification on an old sin. Both Martin Luther and John Calvin, along with their followers, expressed severe disappointment with what was taking place, going so far as to claim that those who practice usury were carrying the "mark of the beast" mentioned of in the Book of Revelations. In many ways, this conflict between the pro and anti-usury crowds helped to spark much of the Antisemitism that began to permeate Europe at the latter portion of the Middle Ages.
In the end, the economic and social revolutions taking place throughout Europe, coupled with the eventual discovery of the "New World" made the conversion to an acceptance of usury a virtual guarantee. The new demands for goods from all across the globe created an environment that was simply too rich for the practice of usury not to flourish. This, of course, eventually contributed to the rise of market capitalism, which is essentially married to the practice of usury. As a result, the long-held prohibition on usury had gone the way of the Dodo Bird.