The word “usury” is often defined in the modern world as something like this from the Oxford English Dictionary: “The practice of charging, taking, or contracting to receive excessive or illegal rates of interest for money on loan.” Up to the sixteenth century, however, the word was generally used to mean any kind of interest charged for a loan of money or property. My upcoming series of blogs will examine what Scripture teaches on this subject.
My thesis is that the Old Testament universally condemns usury on money or property loaned out to fellow Israelites, but that it does so out of a specific historical context. To some degree, that context had begun to change even by New Testament times, and even more so as agrarian economies gave way first to mercantilism and then to free market approaches. At the end of the series, there will be a brief word on Church history and on the applicability of these specific biblical texts to the modern world.
Seven primary texts in the Old Testament deal with the issue of usury. While the New Testament does not address the issue directly, there are at least two texts in which “interest” issues are briefly mentioned. These texts will be examined carefully in an attempt to ascertain the exact biblical teaching.
Usury in Exodus
The Decalogue is given to Moses in Exodus 20:3-21, followed by a command from the Lord that Moses builds an altar (20:22-26). The three following chapters (21–23) contain what many scholars call the Covenant Code. These include laws on servants (21:1-11), laws on injuries to people and animals (21:12-36), laws on property (22:1-17), social and religious requirements (22:18–23:9), laws on Sabbaths and annual religious festivals (23:10-19), instructions to obey God during and after the conquest of the land (23:20-33), documentation of the covenant and God’s confirming glory (24:1-11), and introduction to laws on the tabernacle and worship (24:12-19).
In the middle of the section dealing with social and religious requirements (22:18–23:9) is a brief though a solemn bit of instruction about borrowing and lending. Borrowing and lending have been part of the structure of society presumably since its inception. Some people have been more successful economically and others less so, and through history, the less successful have had to place themselves in positions to borrow from those who had the wherewithal to lend.
Usury in the Ancient Near East
In the Ancient Near East, lending was very common, as attested by surviving evidence from the time. In Babylon, it was common to lend food or produce at thirty-three and one-third percent interest and to lend money (silver bullion) at twenty percent. In Nuzi in the same period, some loans were made at fifty percent, and there were specific regulations in many lands about what that interest could be.
In a detailed study of such Ancient Near East practices, one scholar has demonstrated that the interest on such loans would be taken out at the time the loan was made, not at the time of repayment. Then, if the loan were not repaid on time, further interest would be charged. Such rates were injurious and subjected many of those who acquired them to be perpetually in the underclass. This was not to be the case for Israel, or so the Lord intended. God’s instructions to Moses here do not simply limit the rate of interest on loans to other Israelites to a moderate amount, but prohibit any interest on such loans. Theologian Walter Kaiser said in his commentary on Exodus, “This law is not dealing with ‘usury’ in our modern sense of the word, i.e., exorbitant or illegal interest, but interest of any kind to a fellow Israelite.”
The significance of this fact is highlighted by the fact that while many earlier portions of the Covenant Code were given in the third person (such as, “if a man seduces a virgin . . . he must pay the bride-price,” 22:16), beginning in verse 22 God the grammar now shifts to the second person; it is now not merely “he,” but “you” and “I.” “If you lend money to one of my people among you who is needy, do not be like a moneylender. . . . When he cries out to me, I will hear, for I am compassionate” (22:25, 27).
This is obviously a matter that the Lord took with great seriousness. The Hebrew word translated “usury” in the KJV (“interest” in many recent translations) is nesek. The medieval Jewish commentator Rashi (Solomon ben Isaac) pointed out that this Hebrew root meant “to bite,” and commented, “it resembles the bite of a snake . . . inflicting a small wound in a person’s foot which he does not feel at first, but all at once it swells, and distends the whole body up to the top of his head. So it is with interest.” Brevard Childs, who quotes Rashi, and other modern commentators concur with that interpretation of the word.
Comparing this Understanding to Today
In this day of commercial loans and the common practice of borrowing money to purchase a home, the emphasis of this text in Exodus and related texts might be confusing to the modern reader. The person in need of money in this text and others is a poor person, indeed, a very poor person. So, according to Kaiser, the “aim was mainly to protect the poor.” The legislation was given so that those who found themselves temporarily dependent on the goodwill of others would not be forced permanently into such a status by the need to pay back more than was borrowed.
This hermeneutical point needs to be kept in mind, in view of the other relevant passages. After giving the instruction to “charge no interest,” God further instructs Moses that items may be exchanged as a pledge of the repayment of the loan; but if it is a necessary item for daily use, it must be returned “by sunset” (22:26). Specifically, a man’s cloak is something that he would need in the cool of the evening, so it must be returned. The point is that part-time collateral is not collateral at all.
In my next blog, we’ll look at texts in Leviticus and Deuteronomy before moving on to other books of the Old Testament.
Editor’s Note: This series is adapted from the IFWE research paper, Usury in Scripture, by Dr. Chad Brand. Read the full paper here.