Matters of interest

O Lord, who shall sojourn in your tent?
Who shall dwell on your holy hill?
He who walks blamelessly and does what is right
… who does not put out his money at interest
and does not take a bribe against the innocent.
He who does these things shall never be moved. (Ps 15:1-2a, 5)

According to Psalm 15, a holy person does not put his money out at interest. Look at it again. See? That’s what it says.

At first glance, this text is either impossibly radical, or just irrelevant. To make ‘putting money out at interest’ a sin is to condemn the core business activity of banks, building societies and credit unions. And since virtually all of us are shareholders, depositors or borrowers with those institutions, it implicates all of us as either perpetrators or victims of that sin.

Stumbling upon this text in a Bible study group, most people would probably grope for some explanation why it doesn’t mean what it seems to say. Perhaps the translation is misleading. Our economic circumstances are very different. And what about the effect of Jesus having released us from the law? In this article, I would like to explore some of these issues, to help us apply Psalm 15:5, and the many texts like it, to contemporary life.

The Old Testament law as a source of wisdom

The majority of the Bible’s references to moneylending are in the Old Testament, the most crucial ones being in the law. (The topic is not really developed in the New Testament.1) This raises an important preliminary issue: what is the status of the Mosaic Law for Christians today?

It is a monumental preliminary issue, but let me offer a very brief answer.

When we approach a verse in the law, we must avoid the trap of asking, “Is this still binding?”, as if a yes/no answer were possible. Instead, we ought to study the law as a source of Christian wisdom. It no longer holds us captive as it did Israel (Rom 7:6), yet, because it still bears God’s holy character (Rom 7:12), it can instruct us on how to love God and our neighbour (cf. Rom 13:8-10).2

After all, we want to love each other, don’t we? By seeking to understand how the Mosaic Law promoted love amongst the Israelites, we can gain wisdom to help us fulfil that desire today.

The poor borrower

The starting point of our search for Old Testament wisdom on moneylending is Exodus 22:25, which focuses on the situation of a poor borrower:

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.

The moneylender (Hebrew nosheh) is a definite bad guy in the Old Testament. He lends for his own gain (which is why he charges interest), and if you cannot repay he will seize everything you own (2 Kgs 4:1; Ps 109:11). An Israelite was not to be “like a moneylender” to a poor person. To do so would be taking advantage of their need for personal gain.

Leviticus 25:35-37 develops this theme by explaining what should be done for a needy person, instead of lending on interest:

If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit.

So, not only was the godly Israelite prohibited from taking advantage of the poor man’s need, but he had a duty to help. Consequently, a neighbour in desperate economic circumstances presented the Israelite with a stark choice: will I help (even though it costs me), or will I seek to turn this neighbour’s need to my own advantage (by acting as a nosheh)?

Does it make a difference if the borrower is not poor?

The Exodus and Leviticus texts are not especially controversial, because most would agree it is wrong to prey on the poor. But then we come to Deuteronomy 23:19-20:

You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. You may charge a foreigner interest, but you may not charge your brother interest …

This passage has two provocative features. First, it says nothing about the borrower being poor. Second, although it prohibited the Israelites from charging interest to each other, it allowed them to charge interest to foreigners. There seems to be a contradiction. The text hints that there may be something morally wrong with all interest-bearing loans, even when the borrower is not poor. But if that is so, doesn’t it allow Israelites to mistreat foreigners?

This contradiction has come to be known as the ‘Deuteronomic double standard’, and there are many attempted solutions. These are usually based on the modern assumption (probably shared by most readers) that there is nothing wrong with lending on interest if the borrower is not poor. For example, some suggest that the ban on interest between Israelites was implicitly limited to the case of the poor borrower, since Israel’s economy was too primitive to have, say, business loans. On this view, the loan to the ‘foreigner’ of Deuteronomy 23:20 is permissible because he is a wealthy travelling merchant.

However, if we are treating the law as God’s wisdom, shouldn’t we allow it to provoke us into questioning our assumptions? Why do we assume that it is harmless and fair to lend on interest to the non-poor? Those who rely on that assumption to explain the Deuteronomic double standard bear the onus of showing that it is true, for when we turn to the main arguments against interest bearing loans, we will find that they hold whether the borrower is rich or poor.

The ethical case against the moneylender

There are two main prongs to the Bible’s ethical attack on the moneylender.

Firstly, the Bible clearly teaches that God’s people should not be lazy, but work hard to provide for themselves, their families and others (e.g. Prov 6:6-11; Eph 4:28). However, it is easy to see that a nosheh lives off the hard work of others. His own hands do not produce food or clothing, he builds nothing, he does not produce delight through music or art, nor does he help the sick or aged, teach the young, or execute justice. This is true regardless of whether his borrowers are poor or rich.

Secondly, the nosheh‘s contract creates an unloving allocation of risk. In order to get a handle on this, let us spell out why we agree that it is wrong to act as a nosheh to the poor. It is actually not as obvious as one might think. After all, the nosheh really does help the poor person in the short term. For example, the nosheh‘s loan might enable the poor person to buy food so he can live another day. That is a real benefit. And in order to confer that benefit, the moneylender must, for a time, go without his money, and whatever benefits it might have purchased for him. That is a real cost.

So why is it unreasonable for the nosheh to expect repayment with interest? Quite simply, because the poor man will probably never have anything to spare with which to repay. He might eke out a living for himself and his family, but rarely anything more. As a result, the nosheh will almost inevitably resort to cruelty when he calls in the loan, as in 2 Kings 4:1.

Consider then a borrower who is not poor. He will probably be able to repay the moneylender. But nothing is certain. If he is injured and becomes unable to work, if his house is destroyed by fire, if his business fails, if his investments crash, or if his child becomes sick and medical bills mount up, it may not be possible for him to repay. And in those circumstances, the moneylender will say, “That’s unfortunate, but it’s not my problem. You still have to pay up.” (It is noteworthy that the victim of Shakespeare’s famous moneylender, Shylock, was not a poor man, but the wealthy merchant Antonio, whose fleet was lost at sea.)

Thus, every loan the nosheh makes, whether the borrower is rich or poor, carries the threat of merciless treatment to recover the debt. The difference between poor and wealthy borrowers is only the probability that such treatment will take place. By reserving this right to plunder his borrowers, the nosheh seeks to protect himself by making his borrowers bear the risks of an uncertain future.

These two characteristics together make the moneylender a parasite who gains money without work and (as far as possible) without risk.

The nosheh and the modern bank

Clearly the nosheh is a nasty character; we can see why the Bible condemns him. But is it fair to transfer our analysis of the nosheh directly to a modern bank? There is one important difference, namely that a bank cannot sell a person into slavery, as was the usual result of debt in the ancient world (Lev 25:39; 2 Kgs 4:1). However, a bank’s business model does share the two principal features of the nosheh; it charges interest, and if you cannot pay, it can and will take all your property.

Some will point out that most bank loans do not result in the borrower losing everything. But, in every case, the threat of that outcome places the borrower under the lender’s power, enabling the bank to extract interest payments over a long period. The bank is just like the village moneylender in that it does not provide any good or service in exchange for these interest payments. This point may be obscured by the fact that thousands of people work very hard in banks, but banks themselves are aware that the purpose of their lending business is to gain money without work. The ANZ Bank once advertised a term deposit with the slogan “Make money in your sleep”.

The heart issue

It would be easy at this point to begin demonizing banks, as is popular in the media at the moment. However, if the chance to ‘make money in your sleep’, risk-free, is attractive to us, we should not be surprised at the banks’ position in our society. They are merely corporate manifestations of our covetous, faithless hearts. We need to repent. God wants us to work for our living (2 Thess 3:10), and to trust him with the risks of tomorrow (Matt 6:34).

We also must not forget that the ban on charging interest was never an isolated negative stipulation. Rather, the flipside of the ban is a positive duty to help (Lev 25:35-37). Thus, every instance of another person’s need or desire presents me with a choice, either to help or to take advantage. If we have wealth that we do not need, God wants us to use it to help others, like the Lord Jesus, who used his riches for our sakes (2 Cor 8:9).

If, then, we have a genuine heartfelt desire to help and not to harm others, there is cause to question whether we should invest in the banking sector, because our ethical analysis suggests that the standard bank loan fails the test of love. Interestingly, fund manager Australian Ethical Invest­ment has excluded three of the big four banks from its portfolio because of their lending profiles.3 Australian Ethical does not object to lending on interest in principle. Yet it recognizes that bank revenue may be earned by socially harmful means. We must be all the more wary of making gains at the expense of harm to others.

The Christian and borrowing

Of course, for many readers, the most pressing question will not be “Should I lend on interest?” but “Should I borrow on interest?” For Christians asking this question, it is worth noting that Jeremiah brackets borrowing from a nosheh together with moneylending as a reprehensible action (Jer 15:10). Also, the band of malcontents who gather to David in 1 Samuel 22:2 include those in debt to moneylenders. These are brief but clear indications that, in the biblical world view, being a moneylender’s customer is not seen as a wise choice (cf. Prov 22:7).

It is not difficult to work out the reasons for this. Firstly, borrowing enables me to consume what I haven’t worked for and don’t own, when in fact I should be working hard to support myself and have something to share.

Secondly, it places me in the power of another person who will treat me without mercy. In Proverbs 6:1-5, the father advises his son what to do if he has put up security or given a pledge (concepts closely related to borrowing from a moneylender: see Proverbs 22:26-27). The advice is “save yourself, for you have come into the hand of your neighbour”. It continues to be true today that every borrower surrenders a part of their freedom to the bank. In some cases, this may lead borrowers to do things they will later regret. For example, a couple may delay having children (or even terminate a pregnancy) because of a home loan. A business owner might sacrifice worker safety in order to keep up with interest payments. In other cases, it will exclude opportunities borrowers might otherwise have had to be involved in the work of the gospel. For example, a mum might like to teach Scripture and be involved in the daytime activities of the church, but a home loan means she has to go back to work. A ministry-minded couple might want to go to Bible college, but cannot because of their mortgage. In almost every case, the worry created by the loan will distract from a wholehearted striving for the glory of God.

All these considerations suggest that Christians should at least be reluctant to borrow from a bank (which means we should absolutely forget about borrowing for luxuries).

However, despite this reluctance, sometimes we may face the necessity of resorting to a bank. For example, we might need to borrow for a car to get to work. Or we may feel that it is necessary to get a home loan, because of the tremendous inconvenience that can result from being a renter in a tight market. By combining an honest decision about what sort of car or house we really need (as opposed to what we want) with a reluctance to surrender our freedom to the bank, we will make wiser borrowing decisions.

Some may protest that this view of borrowing is too negative, and that by borrowing to invest in a quality property they are actually being shrewd with the resources God has given them, by securing an appreciating asset and providing for their future. In reply to this, it must be acknowledged that borrowing to buy a house has often turned out to be financially advantageous, because prices have risen. But on the other hand, we do not know the future. Ongoing price rises are not certain (illustrated clearly by recent events), and if they fail to materialize, our ‘shrewdness’ looks rather silly. More importantly, we need to search our hearts and ask what our real motivations are for trying to make capital gains. Is it really to increase our resources for the gospel, or is it for our own comfort? And even if I do intend to use the extra time and money I will have in twenty years’ time for the glory of God, is it worth the worry and distraction today?

The question to ask oneself honestly is: what will maximize my freedom, now and in the future, to strive for the glory of God?

How then shall we live?

If you’re feeling overwhelmed about where to start living out this teaching, here are some ideas:

What then of the Deuteronomic double standard?

Having seen that there are good reasons why God would have prohibited all loans on interest in ancient Israel, we are left to puzzle why he permitted them to make such loans to foreigners.

Two observations are relevant. Firstly, moneylending is not the only area where the Mosaic Law privileges the Israelite. The laws protecting slaves and providing for their release after six years were confined to Israelite slaves (Exod 21; Lev 25; Deut 15). Yet no-one doubts that those slavery laws offer wisdom on loving one’s neighbour.

Secondly, it may be significant that, while Israelites were allowed to charge interest (Hebrew neshek) to foreigners, they were never explicitly allowed to act as a nosheh toward a foreigner. (In Deuteronomy 15:6 and 28:12, where it says that the Israelites will lend to the nations, different Hebrew words for lending are used.) It is therefore possible that the type of finance deal in mind in Deuteronomy 23:20 is one where the foreigner (perhaps a travelling merchant) leaves a pledge with the Israelite lender as security. The foreigner may return, repay the loan with interest and redeem his pledge, or he may not. There is an element of mercy in this contract, because he does not stand to lose more than his pledge.

In any case, the Deuteronomic double standard is well short of being an endorsement of lending on interest as a more excellent way. In the end, our conclusions do not rest on a flat reading of this or any biblical text, but on the ethical reflection it prompted. This is a good example of how the Old Testament Law can give us wisdom for loving God and neighbour.


1 Some think that Jesus approves of charging interest in the parable of the talents (Matt 25:27), thus abrogating the Mosaic rule, as when he declares all foods clean in Mark 7. However, Jesus is telling a story. We should not assume that he approves everything his fictitious character does, especially when that character is a ‘hard man’ (Matt 25:24). Jesus’ only other reference to moneylending, Luke 6:35, is in keeping with the Old Testament view.

2 For more on the law as wisdom, see Andrew Cameron, ‘Liberation and Desire: the Logic of Law in Exodus and Beyond’, in Exploring Exodus, edited by Brian Rosner and Paul Williamson, Apollos, Nottingham, 2008, pp. 123-53.

3 Malcom Maiden, ‘Ethical fund tests appetite for shareholder activism’, Sydney Morning Herald, 10 July 2010.

2 thoughts on “Matters of interest

  1. I found Andrew Schmidt’s article on interest most thought-provoking. It is easy to deflect the implications with the reminder that the average Australian bank account pays little or no interest. However, the fact that all Australian workers are paying compulsory super with the forlorn hope and government expectation that it will provide some form of retirement income, the question of whether it is a godly practice to expect our money to work for us is one that we need to consider.

    I can see the relevant application of the Old Testament teaching to the church context, i.e. not lending money to a fellow believer and demanding interest. The question of a home mortgage seems more complicated. Should our churches be full of home renters? Can we know what the situation was for those in New Testament times, and can we apply their experience to our times? Is this putting culture above God’s word?

    When Jesus visits the homes of his disciples and their families, or those of tax collectors, were these owned by the hosts? When Paul stayed with members of the early church, did the independent income he took pains to earn help pay for the rent as well as the groceries?

    The Bible appears to be silent on this aspect of lifestyle. Well, almost. Acts 4:34 makes it clear that there were properties owned by members of the church. Did these people build their own houses, buy, inherit, or rent these properties? The description of the practice of selling them to raise money for the poor suggests that these were investments rather than the family home. Does this commend property above any other form of investment?

    To my limited reflection, the message on interest is important in the principles of caring for the poor, avoiding greed, exercising wisdom in investment decisions and not relying on the hard work of others to pay for our own leisure. It is less specific on the matter of investment and return. I think that this requires further discussion and reflection and I thank Andrew for raising such a relevant issue and exploring it with biblical faithfulness.

    • I’m grateful for Philip’s thoughts, and pleased if my article has helped with general principles of prudence and generosity. I would, however, still plead with readers to be provoked on the specific matters I raised. As Philip’s letter demonstrates, questioning bank lending inevitably raises questions about other sacred cows, such as home ownership.

      Owner occupation in ancient Israel was achieved by dividing up the land equitably at the start, and not allowing a family to sell its land permanently (Lev 25:23). Construction costs were lower because houses were simpler. Home loans were unnecessary.

      We cannot recapture that situation, of course, although choosing to be contented with simpler homes would be a good start. After that, Christian families could think about how the older generation might help the younger—something which Paul sees as part of nature (2 Cor 12:14). Consider this. If you are currently living off superannuation, chances are your retirement income is partly sourced from your children’s mortgage payments. Ever thought of cutting out the middleman?

      But in the end, I do not think God cares much whether we are renters or home owners. He does care if we exhaust ourselves in pursuit of middle- class aspirations, leaving nothing left in the tank for the work of his kingdom. Were you a renter when called? Do not be concerned about it. But if you can buy a house (without sacrificing your freedom), avail yourself of the opportunity (cf. 1 Cor 7:21).

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