Hi Thomas, welcome to CF. I hope your time interacting with other christians is fruitful. I am sad to say however, after such a warm welcome that I must report to you that everything in the above statement is wrong. Luther actually had a great knowledge of scripture and taught scripture at the University of Wittenberg prior to his posting of the 95 theses. Second, the idea that Luther invented the doctrine of Sola Fide is simply false. Luther is simply repeating what the Apostle Paul and later the early church fathers' taught. For example, and I can cite many others, John Chrysostom in his Homily on Acts 15:1 has this to say:
Everywhere he puts the Gentiles upon a thorough equality. “And put no difference between us and them, having purified their hearts by faith.” (v. 9.) From faith alone, he says, they obtained the same gifts. This is also meant as a lesson to those (objectors); this is able to teach even them that faith only is needed, not works nor circumcision.
John Chrysostom. (1889). Homilies of St. John Chrysostom, Archbishop of Constantinople, on the Acts of the Apostles. In P. Schaff (Ed.), J. Walker, J. Sheppard, H. Browne, & G. B. Stevens (Trans.), Saint Chrysostom: Homilies on the Acts of the Apostles and the Epistle to the Romans (Vol. 11, pp. 201–202). New York: Christian Literature Company.
Or Clement of Rome, one who Rome says was an early Pope:
They all [sc. the patriarchs] were honoured and glorified, not through themselves or their works or their righteous behaviour, but through God’s will. And we also, who have been called in Christ Jesus through his will, are not justified through ourselves or through our own wisdom or understanding or piety, or our actions done in holiness of heart, but through faith, for it is through faith that Almighty God has justified all men that have been from the beginning of time: to whom be glory for ever and ever. Amen.
Bettenson, H. (Ed.). (1969). The Early Christian Fathers: A Selection from the Writings of the Fathers from St. Clement of Rome to St. Athanasius. (H. Bettenson, Trans.) (p. 30). Oxford; New York: Oxford University Press.
Let's examine the text in question. James 2:14-26 (ESV)
14 What good is it, my brothers, if someone says he has faith but does not have works? Can that faith save him? 15 If a brother or sister is poorly clothed and lacking in daily food, 16 and one of you says to them, “Go in peace, be warmed and filled,” without giving them the things needed for the body, what good is that? 17 So also faith by itself, if it does not have works, is dead.
18 But someone will say, “You have faith and I have works.” Show me your faith apart from your works, and I will show you my faith by my works. 19 You believe that God is one; you do well. Even the demons believe—and shudder! 20 Do you want to be shown, you foolish person, that faith apart from works is useless? 21 Was not Abraham our father justified by works when he offered up his son Isaac on the altar? 22 You see that faith was active along with his works, and faith was completed by his works; 23 and the Scripture was fulfilled that says, “Abraham believed God, and it was counted to him as righteousness”—and he was called a friend of God. 24 You see that a person is justified by works and not by faith alone. 25 And in the same way was not also Rahab the prostitute justified by works when she received the messengers and sent them out by another way? 26 For as the body apart from the spirit is dead, so also faith apart from works is dead.
So what is going on here? First, James is exhorting those who claimed to have faith but said faith was not accompanied by good works is a dead faith. In other words one cannot merely have a intellectual assent to a doctrine and that's it. Compare the faith James is speaking of with the faith Paul is speaking of in Eph 2:8-10 (ESV)
8 For by grace you have been saved through faith. And this is not your own doing; it is the gift of God, 9 not a result of works, so that no one may boast. 10 For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them.
Conclusion? There is no contradiction between James and Paul. And if I might add there is contradiction as you indicated then there are two possibilities: One of the two texts are not God-breathed (θεόπνευστος) or God the Holy Spirit isn't consistent it what He teaches.
You mean Albrecht of Mainz? The one who was guilty of outright Simony whose debt was the reason why indulgences were being sold in Germany at the time that sparked Luther to write the 95 theses? Yes, that local bishop. Well lets take a look at the historical record for James. James is considered with Hebrews, 2 Peter, 2 and 3 John, Jude and Revelation to be Antilegomena meaning "spoken against". This is historically true. Eusebius writes:
3 Among the disputed writings, which are nevertheless recognized by many, are extant the so-called epistle of James and that of Jude,10 also the second epistle of Peter, and those that are called the second and third of John,12 whether they belong to the evangelist or to another person of the same name.
Eusebius of Caesaria. (1890). The Church History of Eusebius. In P. Schaff & H. Wace (Eds.), A. C. McGiffert (Trans.), Eusebius: Church History, Life of Constantine the Great, and Oration in Praise of Constantine (Vol. 1, p. 156). New York: Christian Literature Company.
Now Luther as a result wrote in his first edition of his translation of the NT that James was a "Strawry epistle" meaning useful, but not very valuable. He later removed these comments from later editions of his NT. The Lutheran Church to this day still regards James as inspired scripture.