Note: This article, part one of a series, first appeared on Biola’s Good Book Blog, one of the posts produced by Biola’s faculty reading group in economic issues. For a more technical analysis, see the author’s article in the Journal of the Evangelical Theological Society.
For much of church history, pastoral leaders believed the Old Testament taught that no interest should be charged on any loans. The care and protection for the Israelite working poor was the main rationale for such a prohibition that no interest should be charged on such loans. “If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him” (Exodus 22:25).
Before we go too much further, let me state the obvious. What we are discussing here is the matter of loans that were offered to fellow Israelites who had the potential for paying the loan back. One doesn’t offer a loan to someone who has no means of paying it back; in that case one offers charity. The subject of charity is a different one, for which the Old Testament makes provision through other means – for example, gleaning (Leviticus 19:9-10), the sabbatical year (Exodus 23:10-11),and triennial tithes (Deuteronomy 14:28-29). The topic of this blog is lending, not charity.
As mentioned, for many years it was understood that the Old Testament taught a complete ban on any interest on loans. For example, Robert Maloney notes: “The Fathers saw the Old Testament prohibition [against usury] as still binding” and that “usury was incompatible with Christian love” (“Teaching of the Fathers on Usury,” Vigiliae Christianae 27, p. 242). Likewise, Brenda Ihssen states: “One safely concludes that they [the Greek church fathers] did not consider usury to be either a moral, justifiable or advantageous action, but in fact, almost unanimously argued against the practice” (They Who Give from Evil: The Response of the Eastern Church to Moneylending in the Early Christian Era, p. 188).
But a question came to my mind: What about loans for other purposes, such as productive loans for business? Was that excluded as well? So I thought I would take another look at the relevant Old Testament passages to find out what the Old Testament says about loans and interest. A report of my study, with the details behind my comments here, are available in a 15,000-word article published in the December 2016 issue of Journal of the Evangelical Theological Society, (vol. 59, p. 761-89): “Lending and Interest in the OT: Examining Three Interpretations to Explain the Deuteronomy 23:19-20 Distinction in Light of the Historical Usury Debate.”
I learned that a few matters may confuse the study of this issue. Firstly, for most of history of the term “usury” meant the same as “interest,” until about the eighteenth century, when “usury” began to mean excessive interest, as it does still today. So when someone after about the 1700s stated they are against “usury,” they meant they were against excessive interest. For documents before that time, when someone agreed that “usury” should be banned, they usually meant they were against any interest, unless a clarification was made.
Another confusion relates to the Hebrew verb nāšak (pronounced as NAHshock) that is translated as “to charge interest.” Earlier Hebrew lexicons, such as The Brown-Driver-Briggs Hebrew and English Lexicon, stated there was only one root, and it meant both “to charge interest” and “to bite.” So charging interesting was like taking a bite, indicating a negative action. For example, Hillel Gamoran reported in 1971 that “the most widely accepted view today is that neshek [the noun] was derived from the Hebrew root n sh k, ‘to bite,’ and referred to interest ‘bitten off’ or deducted before the loan was advanced” (“The Biblical Law against Loans on Interest,” Journal of Near Eastern Studies 30, p. 131).
Yet more recent lexicons, such as the nine-volume Dictionary of Classical Hebrew, identify two separate roots for this homonym: root I is “to bite” (12 times in the Old Testament, mostly of snake bikes), and root II is “to charge interest” (verb used 5 times in the Old Testament). So there is no connection between charging interest and biting.
Finally, there are two different Hebrew terms that relate to our particular subject of lending. Lending with interest (nāšak, root II, used 5 times) is the term occurring in Exodus 22:25, quoted above. The other term, lending with a pledge (nāšā, pronounced as NAHshah, used 12 times as a verb) appears, for example, in Deuteronomy 24:10: “When you make your neighbor a loan of any sort, you shall not go into his house to collect his pledge.” Regarding the economic crisis that is recorded in Nehemiah 5: 7 and 10, some English versions translate the verb as lending with interest (e.g. ESV, NASV, NIV). Yet the verbal form here is derived from this particular term – lending with a pledge. A better translation is offered by the NET Bible: “Each one of you is seizing the collateral from your own countrymen!” (Nehemiah 5:7).
The three key passages against charging interest on loans are in the Pentateuch: Exodus 22:25, Leviticus 25:35-37 and Deuteronomy 23:19-20. The key difference in the passages, and the source of the longstanding controversy, was based on the difference between Exodus 22:25 and Leviticus 25:35, which focus the ban on interest in loans for the poor, whereas Deuteronomy 23:19-20 excludes interest on loans to “your brother.”
We will take up that aspect of the study in the next installment of this series.