Exodus 22:25: Is Charging Interest Permitted?
Discussion about money divides friends, and when it comes to talking about interest on money from a biblical point of view, it divides interpreters! To be sure, the one "who lends his [or her] money without usury [interest]," according to Psalm 15:5, is a godly man who also "does not accept a bribe against the innocent." But what is not immediately noticed is that the borrower is usually described as one who is in need and who is unable to support himself or herself. That point is made in two of the three main teaching passages on this topic, namely Exodus 22:25 and Leviticus 25:35-37. (The third passage is Deut 23:19-20.)
The reason for such a stern prohibition against charging interest was that all too many in Israel used this method to avoid helping the poor and their own fellow citizens. Deuteronomy 23:20 did say, "You may charge a foreigner interest." Apparently this was the same as charging interest for a business loan or an investment. The foreigner fell under the category of the "resident alien" who had taken up permanent residence among the Israelites. But where the law protected a "resident alien" with the same privileges granted a native Israelite, we may expect the same prohibitions against loaning at interest to the poor (see Lev 25:35).
Of course, all morality condemned excessive rates of interest. Proverbs 28:8 warned, "He who increases his wealth by exorbitant interest amasses it for another, who will be kind to the poor." The prophet Ezekiel also described the "righteous person" as one who "does not lend at usury or take excessive interest" (Ezek 18:8, see also 18:13, 17; 22:12).
What has changed the sentiment in modern times on legitimate forms of interest-taking is an altered perception of the nature and use of money. In the first place, loans today are mostly needed for quite different purposes. In that day it was only a matter of extreme and dire need that would force a person into the position of needing to borrow. In these cases what was owed to one another was compassion. People were to help one another, not use their neighbor's calamity as the opportunity to realize quick and illegitimate profits.
In modern times loans are required principally as a means of increasing the capital with which one works. Unless one has the increased capital, one may not be capable of bringing in the increased revenue. But in ancient times such concerns were not as large as they have become. Loans then were almost exclusively for the purpose of relieving destitution and extreme poverty.
While Hebrew uses two different terms for interest, it is doubtful one can distinguish between them, such as between a long-term and short-term loan, or an exorbitant rate of interest versus a fair rate of return for the use of one's money. Neither can it be said that one relates to the substance loaned and the other to the method by which the loan was computed.
It is a reasonable conclusion that interest was and is still approved for those ventures not attempting to circumvent one's obligation to the poor. This thesis is reinforced by Jesus' allusion to and apparent approval of taking interest for commercial ventures in Matthew 25:27 and Luke 19:23.
The appropriateness of loaning money to a church or a Christian nonprofit agency at interest is also greatly debated. Some counsel that ministries that invite "investments" with the offer to pay back the principal with interest may well end up paying the interest out of the tithes, thus robbing God.
If the reason for the prohibition on all church loans is that believers are not to be charged interest, then I must demur, since that is not the biblical reason. Scripture is concerned about our dodging our responsibilities to the poor in our midst. The absolute prohibition of lending at interest to believers will not stand scriptural scrutiny. This is not to say that there are no other traps in this whole discussion. There are. The abuse of the tithe would be a most serious matter. However, because ministries seem to grow in proportion to their facilities, a group may choose to build ahead in order to expand both their ministry and their base of supporters. Such an expansion is not only warranted but may be a legitimate and responsible exercise of good Christian stewardship.
The Bible is anxious mainly about a profiteer's loan which should have been a charity loan at no interest. Once that demand has been met, other principles in Christian morality must be met as well, but the pressure will no longer be to decry all forms of interest-taking as such.