The Principle and Gross Injustice of Usury by Brian McCall, JD, author of The Church and the Usurers, Unprofitable Lending for the Modern Economy (Sapienta Press, May 2013), gave a very interesting talk at the Fatima: Path to Peace conference on usury and defends the Church's ancient teaching regarding it:
[youtube]http://www.youtube.com/watch?v=q9dJ3ojv2iA[/youtube]
I never knew the Church condemns usury, not (fair) interest; there's a difference. Usury is selling a product to someone and then charging them to use it. He gives an example (from St. Thomas): If I sell you a bottle of wine, and then charge you to drink it and even demand you give the bottle back, this is usury because I am charging you to use the product I sold you. However, if I want to borrow a brick of gold from you, but it is stored 100 mi away, justice demands you may charge interest to cover the costs of traveling 200 mi to get the gold brick; this is (just) interest. But to lend someone money and charge them more just to use the money is usury.

What's interesting is that the Church teaching on usury condemns "Digital Rights Management" (DRM), which controls how consumers use their digital products! If a record company sells me a CD, I now have ownership of it. That means I should be able to lend it to others, copy it for personal use, etc.

St. Thomas explains all these things well (Summa II-II q. 78 a. 1 c.):

To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice. In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself and for this reason, to lend things of this kin is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.

On the other hand, there are things the use of which does not consist in their consumption: thus to use a house is to dwell in it, not to destroy it. Wherefore in such things both may be granted: for instance, one man may hand over to another the ownership of his house while reserving to himself the use of it for a time, or vice versa, he may grant the use of the house, while retaining the ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides this, revendicate the house from the person to whom he has granted its use, as happens in renting and letting a house.

Now money, according to the Philosopher (Ethic. v, 5; Polit. i, 3) was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.

Cf. also "Is Usury Still a Sin?"