Short answer. Yes, and in that situation he must. Article 2104 says a creditor cannot use the pledged thing without the owner's authority, but where the preservation of the thing requires its use, it must be used by the creditor — only for that purpose. Preservation is the one exception.
What the law says
When the preservation of the thing pledged requires its use, it must be used by the creditor but only for that purpose.
Civil Code, Article 2104 — No Use Without Authority. Read the full provision →
The general rule: no use without your authority
When you pledge something as security for a debt, you hand over possession but you do not hand over the right to enjoy it. Article 2104 states plainly that the creditor cannot use the thing pledged, without the authority of the owner. The lender holds your item to secure repayment, not to drive your car, wear your jewelry, or operate your equipment for his own benefit. If he uses it without your permission, or otherwise misuses it, the law gives you a remedy: you may ask that it be judicially or extrajudicially deposited — that is, moved into the safekeeping of a neutral holder — so the pledged property is protected from a creditor who is not respecting its limits.
The preservation exception, and its narrow purpose
Your question points to the one carve-out. Article 2104 continues: when the preservation of the thing pledged requires its use, it must be used by the creditor but only for that purpose. Some things deteriorate if they simply sit idle — a machine that seizes up if never run, an animal that needs exercise, equipment that must be operated periodically to stay functional. In those cases, using the item is not a liberty the creditor takes for himself; it is a duty he owes to keep the security intact. Notice the wording: it must be used, and only for that purpose. The creditor is not free to expand this into general personal use.
Where the line falls in practice
So the answer turns on why the item is being used. If running or handling the pledged thing is genuinely what keeps it from breaking down, the lender is not only allowed but obliged to do so, because he is also bound to take care of the thing while it is in his hands. But the moment his use goes beyond what preservation demands — using your item for his convenience, profit, or enjoyment — he has crossed back into the prohibited zone, and you can again ask that it be deposited elsewhere. The exception protects the property; it does not become an excuse for a creditor to treat your pledged thing as if it were his own.