Interest on Loans in the Old Testament, Conclusion

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By Klaus Issler; part four of a series. Reprinted from the Oikonomia Network.

Three main passages in the Torah address the topic of lending and interest:

Exodus 22:25: If you lend money to any of my people with you who is poor…you shall not exact interest from him.

Leviticus 25:35 and 37: If your brother becomes poor and cannot maintain himself with you, you shall support him….You shall not lend him your money at interest, nor give him your food for profit.

Deuteronomy 23:19-20: You shall not charge interest on loans to your brother….You may charge a foreigner interest, but you may not charge your brother interest. (ESV)

Although the first two passages clearly state that the focus of the ban on interest is against loans to the poor, the third passage does not specifically mention the poor. This omission of a reference to the poor in Deuteronomy 23:19-20, combined with the influence of pre-existing Greco-Roman cultural taboos against all lending of money at interest, contributed to the belief (dominant from the early church until the late medieval period) that the Old Testament teaches a complete ban on interest for any loans among Israelites.

In this series, we have identified three major strategies for understanding the distinction between “brother” and “foreigner” in Deuteronomy 23:19-20:

  • View A: Ethnic status distinction (Israelites v. foreigners as enemies) implying a total usury ban
  • View B: Ethnic status distinction (Israelites v. foreigners as strangers) implying a two-tiered ethic
  • View C: Economic status distinction (poor v. merchants) implying restrictions on interest for the poor

In the previous installment, I reviewed a number of problems with the first two interpretive options. In this final post of the present series, I briefly state the evidence supporting the third option. In a future series, I will offer some thoughts on how we might draw on the Torah’s teaching about lending money at interest for the present day.

The Economic Status interpretation takes the “brother” in v. 19 to refer to an unfortunate poor person who seeks a loan because he is in need, and the “foreigner” in v. 20 as a traveling merchant who seeks a loan for commercial purposes. Thus the intended contrast is between loans to people in need and investments in commercial ventures. Interest is forbidden on loans to the poor because we ought not to exploit other people’s need for gain. Interest is permitted on commercial loans because empowering such ventures serves human needs, and the interest implicitly compensates the lender’s risk and lost use of the money.

Thus, on this view all three passages convey the same prohibition on taking interest from loans to the poor, with Deuteronomy 23:19-20 using ethnic references to describe this economic distinction. Mark Biddle summarizes this perspective: “In fact, since most traders in the ancient Near East did business internationally, the permission to charge interest of ‘foreigners’ may be understood less as a form of ethnocentricity and more as drawing a distinction between lending to the needy in one’s community and credit as a component of commercial transactions” (Mark E. Biddle, Deuteronomy, Smyth and Helwys, 2003, p. 252-253; see also Mark E. Biddle, “The Biblical Prohibition Against Usury,” Interpretation 65 (2011): 117-121).

The Hebrew term for “interest” (nešek; sounds like ne-shek) is predominantly used in the Old Testament with a contextual focus on protection for the poor. It occurs twelve times, appearing three times in Deuteronomy 23:19. Of the nine other uses outside of Deuteronomy 23:19, seven have a clear contextual focus on protecting the poor: Exodus 22:25; Leviticus 25:36-37 (two uses); Proverbs 28:8 and Ezekiel 18: 8, 13 and 17. Bruce Waltke notes: “The parallel, ‘poor,’ in Proverbs 28:8 and the context (see v. 3, 6 and 11) strongly favors restricting its meaning to charging interest from the needy” (Bruce Waltke, The Book of Proverbs: Chapters 15-31, New International Commentary on the Old Testament, Eerdmans, 2005, 413). Thus, by inference from these seven occurrences, this same emphasis on protecting the poor should be expected in the three uses of nešek in Deuteronomy 23:19. This harmonizes with View C but not with Views A and B, which relate this passage to ethnic status distinctions rather than economic status distinctions.

The term usually translated in the Old Testament as “foreigner” (nokrî; sounds like nah-kree) conveys a distinctly economic association. Scholarly consensus holds that it designates a foreign merchant or trader in Deuteronomy 23:20. Jeffrey Tigay writes: “The foreigner is normally a businessman visiting the country for purposes of trade, and he borrows in order to invest in merchandise and make a profit, not to survive poverty. There is no moral imperative to remit loans made for such purposes [Deuteronomy 15:3] or forgo interest on them [Deuteronomy 23:20]” (Jeffrey H. Tigay, Deuteronomy, The JPS Torah Commentary, The Jewish Publication Society, 1996, p. 218). A similar economic sense can apply also to Deuteronomy 14:21 and 15:3.

This economic meaning (“merchant”) for a general term (“foreigner”) is not unique in the Old Testament. A similar secondary association for “trader” exists for the general term “Canaanite” (kĕnaʿănî; sounds like kuh-naw-uh-nee), which is translated as “trader” in ten Old Testament cases (Job 41:6; Proverbs 31:24; Isaiah 23:8; Ezekiel 16:29 and 17:4, Hosea 12:7, Zephaniah 1:11 and Zechariah 11:7 and 11, and 14:21). Thus, nokrî would be best rendered as “(foreign) merchant or trader” in Deuteronomy 23:20.

Moreover, a conceptual “explicit-implicit parallel” regarding restrictions and permissions of interest-taking is evident in the three Torah usury passages. Walter Kaiser clarifies this explicit-implicit interpretive guideline for the OT law: “When an evil is forbidden in one of the commandments, its opposite good must be understood as being encouraged” (Walter Kaiser, “Exodus,” in The Expositor’s Bible Commentary, Vol 2., ed. Frank E. Gaebelein, Zondervan, 1990, p. 421).

Exodus 22:25 and Leviticus 25:35-37 explicitly teach a ban against taking interest on loans with the poor. That also implies that when making loans for other purposes – not loans to the poor for subsistence – then it is morally legitimate to take interest. This second point is explicitly stated in Deuteronomy 23:20; Israelites may take interest from a nokrî, a foreign merchant or trader, as was implicit in Exodus 22:25 and Leviticus 25:35-37. Exodus 22:25 includes a similar sort of contrast, as translated in the NIV: “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest.”

Finally, an earlier section in Deuteronomy treats the subject of lending in which there is an explicit reference of concern for the poor, in wording very similar to the usury passage in Leviticus 25:35: “If among you, one of your brothers should become poor, in any of your towns within your land that the LORD your God is giving you, you shall not harden your heart or shut your hand against your poor brother” (Deuteronomy 15:7). It seems appropriate to regard Deuteronomy 23:19-20 as a follow-up to Deuteronomy 15:7-11, in which the focus was concern for the poor brother.

Peter Craigie affirms that all three Torah usury passages convey the same ban on loans to the poor: “Loans were normally made in an attempt to alleviate poverty [Deuteronomy 23:19], as is made clear by the parallel legislation to these verses [Exodus 22:25; Leviticus 25:35-36]” (Peter Craigie, The Book of Deuteronomy, Eerdmans, 1976, p. 302). Thus, Deuteronomy 23:19-20 could be paraphrased as: “Do not charge interest on subsistence loans to the poor and needy, but you may charge interest on loans for other purposes, including for commerce.”

Note: This series is adapted from posts that originally ran on Biola’s Good Book Blog. For a more technical analysis, see the author’s academic journal article.

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