New Testament teaching on Interest/Usury

[mike]

Discussion continued from this thread.

Question of this thread: What does the New Testament teach about usury/charging interest on loans? Or, more specifically, do Jesus or the apostles forbid the practice of charging interest when loaning money?

A great topic.

Anabaptists generally don't focus on Old Testament law but rather on the teachings of Jesus. Luke 6 doesn't actually address usury. It goes much further, promoting the idea of lending without expecting the principal to be returned. But Jesus did not seem to be setting up such as a law per se, but rather something that brings "credit" or "reward" to the lender.

That's like saying Matthew 5 doesn't address murder or divorce or oaths because it goes much further. Both are true. He addresses the topics *by* going much further. Anabaptists have done a good job literally following these commands of Jesus, but Luke 6 is a neglected passage in my opinion.

The OT laws basically say "You should lend to your fellow Jew and not expect anything but the principle back". Jesus says "You've heard that, but come on! Even sinners lend to each other without charging interest. You should be doing *more* not less! You should lend even to those outside your "camp". And instead of just refraining from charging interest, you shouldn't even really expect the *principle* back!"

Somehow, the church has got it in its head to not do the "more" that Jesus commands when it comes to our economic relationships with other people... we even do **less**!!!!

34 And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. 35 But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked.

Jesus had a great deal to say about wealth, the dangers of it and how to handle it, which I think is a significant topic that is neglected in Anabaptist sermons. I just don't know that usury must be a key part of that topic. Personally I think that with business loans in particular, where the borrower is profiting off the money from the lender, it is only fair that interest is paid on the loan. I don't think we have a right to demand that a fellow Christian loans us money interest-free in order for us to make money. However, there is nothing wrong with forgoing interest if the lender so chooses, or even repayment of the principal of a loan.

This is why I think it's a necessary topic for sermons today. Too many Christians just think "it's right" to charge usury, without critically examining *why* we feel that way. Jesus says we should be doing more than the OT law, and we settle for LESS instead! If we critically examine our history, we'll see that 1400ish years of church history agreed that usury was wrong for any Christian to practice, and it was only the world's changing values in the economic sphere that led the church astray and to eventually change its position on usury and even the definition of "usury" itself.

I notice, though, that you aren't talking about Jesus going "much further" on the issue of loaning money (the idea of not expecting the principal to be returned). You're focusing specifically on not charging interest. That's perfectly fine, I don't have a problem with it, but I am curious why something Jesus didn't explicitly mention is in focus, and not the proposal he actually makes.

I think you may be arguing that the idea of charging interest is implicitly forbidden by Jesus here. Am I understanding you correctly?

Side question: is there a reason to use the term usury as opposed to interest?

[Praxis+Theodicy]

I notice, though, that you aren't talking about Jesus going "much further" on the issue of loaning money (the idea of not expecting the principal to be returned). You're focusing specifically on not charging interest. That's perfectly fine, I don't have a problem with it, but I am curious why something Jesus didn't explicitly mention is in focus, and not the proposal he actually makes.

You're right, I'm not (yet). In my view, the church has conceded to changing culture and let go of hundreds of years of conviction against usury. Jesus wants us at the top of the hill of righteousness, but the church has slid down into the ditch. I'm pointing out that we've backslidden, because until the church comes to grips with that, Jesus' *actual* commands (the top of the hill) will be dismissed as "impossible perfection". I've spend 36 years in Evangelicalism, and trust me, at this point, that is how ALL of Jesus' teachings are viewed. It wasn't until I discovered the Anabaptist movement that I realized there were people who took any of the commands of Jesus seriously at all.

I think you may be arguing that the idea of charging interest is implicitly forbidden by Jesus here. Am I understanding you correctly?

I would argue that Jesus' commands to "lend even to your enemies; lend, and expect nothing in return" should be read and applied the same way we read his similar commands concerning divorce, oaths, retaliatory violence, etc. To make it clear: I think Jesus affirms the laws prohibiting usury in the old testament, with the added commands to "expand" those laws: first to expand *who* they apply to, and second, to further limit the *extent* to which we are to "demand back" from those we lend to.

However, that is a really long and involved topic, and I'll repeat that before that topic is considered, we need to honestly assess how much we've backslidden before we can address the true implications of Jesus' "beyond" commands.

Side question: is there a reason to use the term usury as opposed to interest?

I use the term "usury" because it still has a negative connotation, and it is this connotation with which the Word of God speaks about the practice of charging interest. The word "interest" was coined by medieval Italian bankers explicitly to skirt around usury laws, by softening the practice in the public mind. The word "usury" has stuck around as a sort of crime involving the charging of interest, but it's been redefined as "exorbitant" interest, instead of interest as such. This kind of cultural redefining of words is a way to excuse sin. I don't really care much about this one way or the other when it comes to the world. My concern is whether the church of Christ has allowed this cultural redefinition of the words "usury" and "interest" to inform OUR approach to economic justice in our relationships with other humans.

[Praxis+Theodicy]

The Story of Usury Across Time

Old Testament
In the Old Testament, the Isrealites were given two basic rules about economic relationships: (1) those who have should be nonhesitant in lending to their fellow Jews who have not and (2) such lenders should expect the principle back, but should not expect/demand anything more (i.e. interest, or, in the original nomenclature, "usury").

These two principles created an economy that would not prevent economic inequality, but it would always be in a state of correcting it. If someone found themselves out of their livelihood because of circumstances, those with more wealth were obligated to lend to them so they could get themselves back on their feet. The lender couldn't profit off of this transaction. It was to be done strictly for the purpose of mutual aid amongst countrymen. This is why the command to "lend freely" and not be close-fisted was just as important, if not more important, than the prohibition of interest. Because there was no "profit motive" for lending, the act of lending to a brother was commanded, encouraged, and praised. Not lending when one had the wealth to lend was discouraged, as was lending for profit by charging interest. It could be talked about at length how the Jubilee Year was another "corrective" measure against economic inequality, but that would be too off-topic.

New Testament
Jesus addresses the two parts of the usury laws when he says "lend even to your enemy and expect nothing in return." For about 1400ish years, Christians consistently interpreted God's Word regarding usury using Jesus' lens on the more detailed old testament laws:

God says not to charge interest when lending to my brother, and from what Jesus says, all men are my brothers, therefore a Christian may not charge interest when lending money.

Christendom
An important note here must be made about the nature of Christendom, from Constantine through the Reformation (and beyond). Simply put, Christian living, entwined with the state, became laws. The reason we know about what the church thought about usury was the laws that Christendom enforced. It should be noted that Jews had their own special laws, and were allowed to practice usury. This was problematic for a number of reasons, but two I'll mention really quick: (1) medieval lords, priests, kings, etc. often "used Jews" to earn profits off of usurious arrangements, and (2) because of differing laws between Christian's and Jews under Christendom, the wider "Christian" population developed extremely derogatory stereotypes of Jewish people as greedy money-grabbers, stereotypes that persist to this day.

The Change
The change from usury prohibitions to a world economy that runs entirely on usury is long and complicated, but suffice it to say, the world, even under Christendom, was constantly working at ways to create loopholes to charge interest because, let's face it, passive income is easy money and it is a sure-fire way to create a class structure where you can come out on top. Whether it was kings or clergy "using Jews" to earn a passive income by loaning out their wealth, or Italian bankers coining the term "interest" to charge usury by another name, it was really inevitable what usury laws would fade, and with them, the actual Christian doctrine that was behind those laws. A big nail in the coffin was colonialism, since sending ships across the Atlantic was a very costly and risky endeavor. Colonialism was potentially massively lucrative for European nations, who all wanted to get in on the New World wealth, but engaging in colonialism was logistically impractical without allowing for usury to pry the wealth out of the hands of the wealthy who just refused to be "open handed" unless they could get a higher return on their risky investment.

After usury laws were abandoned, several justifications rose up to respond to God's Word on the subject, and they are all essentially "Just Usury" theory to compliment "Just War" theory.

Usury in Other Cultures
It should be noted that Judaism and Christianisty are not unique in prohibiting usury. Most cultures and religions had various prohibitions against charging interest. Prior to the last 600ish years, usury across the world was seen as an injustice that was performed by the "haves" to exploit the condition of the "have nots" to create a further economic divide. Usury often led to slavery. In antiquity, it was very well understood that lending at a profit was an unproductive and unjust activity. Even today, some religions and cultures maintain at least a semblance of these prohibitions. In Islam, interest ("riba") is prohibited (and yes, to engage in global capitalism, Islamic elites use a ton of loopholes to skirt ribs laws. Humanity never changes).

[Ken]

I tend to think that economics, finance, and financial institutions have evolved such that they are unrecognizable compared to what existed in Biblical times.

Just like modern transportation and communications (freeways, airports, mass media, electronic communications, etc.) are unrecognizable from what existed in Biblical times.

First of all, in Biblical times there was no understanding of inflation. Currency was in the form of gold, silver, and copper coinage and did not change in value over time. The Romans eventually started to dilute the percentages of silver and gold in their coins to pay for their legions and military adventures but that didn't really start to cause meaningful inflation until the 2nd and 3rd centuries and wasn't recognized as such until still later. So the concept of inflation does not exist in the Bible and was not understood in Biblical times.

Second, lending in Biblical times was largely emergency lending. Farmers would borrow money from money lenders so they could feed their families in times of crop failures and crises. They idea of people borrowing money for consumer spending, car loans, mortgages on houses, business investment, etc. largely did not exist. The first modern banks used to finance commercial ventures did not really emerge until the Renaissance. So the notion of say taking out a 5-year car loan on a new SUV, or a 30-year mortgage on a home in the suburbs, or a business loan to open a new factory didn't exist in Biblical times.

So what does that mean with respect to usury in the Bible? In Biblical times, borrowing was largely something done in response to crisis rather than desire for consumer goods. So money lenders were largely taking advantage of desperate people trying to feed their families and not people looking to lease the latest $50,000 SUV or buy the latest fashions on credit.

Also, borrowing and repayment was done in using fixed coinage with stable value. You borrowed 10 silver coins and repaid 10 silver coins of the same value. Inflation was not understood. We could do the same thing today.

Say you borrowed a one ounce gold coin in 2013. The price of gold was about $1200/ounce in 2013 and so you received the equivalent of $1200 which you then spent to buy food for your family. If you repay that same one ounce gold today it will cost you about $2000 to repurchase at today's gold price in order to repay your lender. So in Biblical units of stable value gold, if you borrowed $1200 in 2013 you would need to repay about $2000 in 2023 which comes out to about a 5.1% interest rate compounded annually. Is it usury to charge 5% interest on a 10-year loan? In our modern world that is the actual effect of loaning someone a gold coin to spend and then expecting them to pay back the same amount of gold 10 years later.

My own non-Biblical moral code is that it is unethical or immoral to take advantage of the hardship or misery of others to make money and that is probably what the Bible was talking about. But there is nothing wrong with charging interest at the rate of inflation to account for the deflating value of real goods and coins over time. Nor is there nothing wrong with banks charging interest for ordinary consumer spending like new cars and McMansions in the suburbs or business ventures that are intended to make money. That is just modern finance which has created a free market in money no different from the free market in grains or fruits or meats or textiles that would have existed in any market square or bazar in any Biblical town where people freely traded goods and bargained and haggled for prices.

[Ken]

It should be noted that Jews had their own special laws, and were allowed to practice usury. This was problematic for a number of reasons, but two I'll mention really quick: (1) medieval lords, priests, kings, etc. often "used Jews" to earn profits off of usurious arrangements, and (2) because of differing laws between Christian's and Jews under Christendom, the wider "Christian" population developed extremely derogatory stereotypes of Jewish people as greedy money-grabbers, stereotypes that persist to this day.

It should also be noted that in medieval Europe Jews were largely prohibited from owning property and participating in craft guilds (carpentry, masonry, textile making, etc.). And so were prohibited from farming and most ordinary trades that involved working with their hands unless they converted to Christianity. Meaning finance and trade (shop keeping) were the few means of making a living that were available to them.

[Praxis+Theodicy]

It should also be noted that in medieval Europe Jews were largely prohibited from owning property and participating in craft guilds (carpentry, masonry, textile making, etc.). And so were prohibited from farming and most ordinary trades that involved working with their hands unless they converted to Christianity. Meaning finance and trade (shop keeping) were the few means of making a living that were available to them.

The entirety of laws for Jewish people as opposed to "proper" citizens in medieval Christendom deserves it's own thread. To your point, Jews often had no real way to live except through lending at interest, often with others' money.

[Josh]

It’s worth noting that Holdemans still hold the stance that simple interest is usury and thus is sin.

In places with hyperinflation like Brazil there are various practical applications to avoid the sin of usury whilst still functioning in the banking system.

[Ken]

It’s worth noting that Holdemans still hold the stance that simple interest is usury and thus is sin.

In places with hyperinflation like Brazil there are various practical applications to avoid the sin of usury whilst still functioning in the banking system.

Do Holdemans take out mortgages and business loans?

[Josh]

It’s worth noting that Holdemans still hold the stance that simple interest is usury and thus is sin.

In places with hyperinflation like Brazil there are various practical applications to avoid the sin of usury whilst still functioning in the banking system.

Do Holdemans take out mortgages and business loans?

Yes. But we don’t believe we should be charging others and profiting off of usury.

[Ernie]

Do Holdemans take out mortgages and business loans?

Yes. But we don’t believe we should be charging others and profiting off of usury.

Are Holdemans more likely to form partnerships or invest in a business and less likely to loan money than other plain Anabaptists? No agenda. Just curious.