Using Latin rather than the vernacular is more in support of setting than plot. Character A has just paid to have some new clothes made for character B. Character B is composing a thank you note (to vastly over-simplify) and includes a slight modification on the Biblical quote "I was naked and you clothed me". In context, both characters are scholars and quoting the Bible in Latin would be not simply second nature to them, but the norm.

As a writer, the problem comes primarily because the verb in this quote is fairly opaque: "nudus et coopervistis me" (where the "clothed" verb comes from the root "oper-" as in a snail's operculum, rather than the more transparent "vest-"). I wouldn't have known it without looking it up, and my test-reader didn't either. So even assuming fairly literate readers, I don't get the effect of "oh, how cute, they're corresponding in Biblical quotations", but rather get "blah blah Latin blah".

I think I'm answering my own question. If I can figure out a way to work in both the Latin and a translation (which is what I've done in other places where the content of a quote is important) that's the way to go. It just seems less likely that they'd do that in writing than in speech (which is the context of the other quote I 'm thinking of). If not, then I think this particular one should be in the vernacular.