First, it isn’t clear that these loans to the poor were in fact mutuum loans at all (see Question 47)

Some medievals argued (with the wide ranging of opinion typical of the human experience) that certain actual costs incurred by lending (called “extrinsic titles”) could be recovered from borrowers who could afford to pay those costs, in addition to the principal amount of the loan, under certain circumstances

This is similar to the situation with contraception and natural family planning. Just as it is possible to engage in otherwise-licit kinds of sex with a “contraceptive mentality”, it is also possible to enter into otherwise-licit kinds of contracts with a “usurious mentality”. The kind (species) of contract or sexual act under consideration may not be intrinsically immoral; but the fact that it is not intrinsically immoral does not make it impossible to do moral wrong in the particulars: in intentions or circumstances. The nature of a particular kind of contract may not be usurious; but it does not follow that the choice to agree to a particular contract of that kind therefore cannot be unjust.

This is exactly as we should expect it to be with a moral doctrine covering a particular species of sin. The moral prohibition of contraception, for example, is not in itself an all-encompassing theory of sexual immorality. Adultery and fornication are sexual sins distinct from contraception, and what is true in the sexual domain is also true in the domain of property: that theft and usury are distinct kinds of sins doesn’t make either particularly ambiguous. Neither the prohibition of theft nor the prohibition of usury constitute Theories of Everything about the moral use of property.

Mutuum contracts are only morally licit as charity. Lending money to someone in need is a good deed. In the middle ages, the Franciscans lent money to the poor as a way of keeping the poor out of the clutches of usury.

13) Didn’t the Church allow the Franciscans to collect “interest” above and beyond the principal on their mutuum loans to the poor? What about “extrinsic titles?”

To the extent the Magisterium has made any formal pronouncements on the matter, as far as I have been able to determine they apply to the non-recourse Mountains of Piety, and to titles which arise from matters entirely extrinsic to the contract such as negligence, theft, or fraud (see Question 49).

Keep in mind that lending to the poor could range practical link from simply handing a needy man money on the street and asking him to return it when he can, to something more institutional and even to agencies sponsored by the sovereign.

Borrowing money from the early Franciscan credit agencies was often a way for the down-and-out to get back on their feet, and borrowers would sometimes default anyway – even after getting back on their feet. In addition, various real costs of administering the loans were incurred by the Franciscans, although they themselves lived under vows of poverty. “Extrinsic titles” were allowed, it was argued, because it is unjust to the poor for those who have already benefited from charitable lending to deplete the supply of capital available to lend to those still in need.

If and when the borrower gets back on his feet and can afford to repay the loan, he owes the lender his money back as a matter of justice

In general the distinction between mutuum loans and other kinds of lending was not always clear in these disputations, and many different kinds of extrinsic titles were proposed and debated. The Franciscan credit agencies were precursors to modern pawn shops, making small non recourse loans with property as security rather than making mutuum loans. Also pertinent to understanding the various disputations is that the medievals were not concerned solely with usury strictly speaking, but with fair treatment in general. Modern commenters tend to introduce ambiguity into the understanding of usury specifically when reading medieval disputations, because of this more general concern with things like just pricing (see Question 50).