The Montes Pietatis, or Mount of piety, was an establishment pawnbroker, which was run charity in from later Middle Ages right up to the 20th century. Although the Montes Pietatis was a European invention, concerns did spring up in overseas colonies, with the Mexican Nacional Monte de Piedad still up and running today.
Run by the Catholic Church, the Montes Pietatis offered monetary loans with low interest to those who found themselves in need. With the guiding principle of the system favouring the borrower and not the lender, it was seen to be more in keeping with the Churches raison d’etre.
The Monte Pietatis relied on collecting a monte – or voluntary donations from the rich – and the needy would bring an item of worth and exchange it for a loan. The loan would last for one year and be worth two thirds of the item of worth. An interest rate was added to the loan and the profits paid for the running of the Monte di Pietà.
The first English Monte Pietatis was started in 1361 by, Michael Northburgh, the Bishop of London. He donated 1000 pieces of silver for the creation of a bank to lend money on a pawn basis but without interest. In Italy, in 1462, the first mention of a Monte di Pietà can be found in the northern town of Perugia. Championed by a Franciscan monk, Marco di Matteo Strozzi, he wished to eradicate Jewish moneylenders from the city and install Christian equivalents which operated in the favour of the borrower rather than the lender.