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Usury, Interest, and Loans: A Brief Summary of Biblical Teaching, With Bibliography

Gary North
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Christians have some vague awareness that the Bible prohibits interest-bearing loans, but they cannot find all of the passages that refer to this, and they have bank accounts and mortgages. They do not feel guilty, but a few may feel uneasy.

I have good news and bad news. It is OK to deposit money in the bank and earn interest. That's the good news. It is unwise to borrow money to buy anything but investments and to meet emergencies. That is bad news for most Christians.

For well over a thousand years, Christian theologians debated the issue of interest on loans. They have relied too heavily on Aristotle, who prohibited interest, and not enough on the Bible. They have misquoted the Bible. They have misunderstood the Bible. They have also had no influence over loans and finance for well over three centuries.

They have gotten the story wrong. What qualifies me to say this? Because I have done what no one else has ever done. I have written 9,000 pages of verse by verse exegesis of the passages in the Bible that relate in any way to economics.

I began this project in 1973. I have completed the exegesis of everything in the Old Testament except the Psalms and the historical works: Joshua to Second Chronicles. I have completed everything in the New Testament except John, which has only three verses, and Mark, which does not add anything to Matthew and Luke. You can download these commentaries free of charge here:

http://www.garynorth.com/public/department57.cfm

So, here is a summary of what the Bible teaches on usury, interest, and loans.


Usury

The English word "usury" has nothing specific to do with the Hebrew and Greek words translated as "usury." This is because, historically, the word has been used in a specific way: "excessive interest."

There is not one verse -- not one hint -- in the Bible that taking excessive interest is wrong.

What is prohibited in Deuteronomy 15:1-7 and Deuteronomy 23 is interest on any loan, in any form, that has been extended to a poor brother in the faith. It is perfectly all right to lend at interest to someone not in the faith. Here, I quote from the King James (1611), since its terminology -- "usury" -- is the familiar source of the debate over usury.

Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it (Deuteronomy 23:19-20).

The Hebrew word translated here as "usury" is nawshak, meaning "bite." Examples:

Dan shall be a serpent by the way, an adder in the path, that biteth the horse heels, so that his rider shall fall backward (Genesis 49:17)

And the LORD sent fiery serpents among the people, and they bit the people; and much people of Israel died (Numbers 21:6).

The word in no way implies "excessive." It means any extra payment at all.

The prohibition applied only to charitable loans to poor brethren in the faith and to a special category of resident aliens, men who had submitted to the Mosaic law. The texts are quite specific.

If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury (Exodus 22:25).

And if thy brother be waxen poor, and fallen in decay with thee; then thou shalt relieve him: yea, though he be a stranger, or a sojourner; that he may live with thee. Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase (Leviticus 25:35-37).

The Hebrew word here translated as "stranger" is different from the Hebrew word for "stranger" in Deuteronomy 23:20. Deuteronomy's stranger was a temporary resident, probably a businessman.

How did a charitable loan differ from a commercial loan? A charitable loan had the following features:

1. There was no interest payment.

2. It was morally mandatory.

3. If the borrower defaulted, he could be sold into slavery.

4. It had a six-year limit, as did the term of slavery.

5. The creditor had to supply tools of production to the indentured servant at the end of the period of slavery.

6. The day of release was on the day of atonement [yom kippur] in the nation's seventh (sabbatical) year

7. It was not mandated by the civil government.

This is laid out in Deuteronomy 15:1-7 and Leviticus 25:1-9.

A non-charity loan could be collateralized by a piece of rural land. The borrower could lose his land for up to 49 years if he defaulted. The 49-year limit was established in terms of the sabbatical periods of seven years: seven times seven. This is discussed in Leviticus 25, the chapter on the jubilee year.

A non-charity loan was not under any restriction with respect to interest. A person who defaulted on a commercial loan that had not been collateralized by land could be sold into slavery, but a unique kind. He had to be paid. Also, he did not receive tools of production at the end of his term of service. This term could be up to 49 years.

And if thy brother that dwelleth by thee be waxen poor, and be sold unto thee; thou shalt not compel him to serve as a bondservant: But as an hired servant, and as a sojourner, he shall be with thee, and shall serve thee unto the year of jubile: And then shall he depart from thee, both he and his children with him, and shall return unto his own family, and unto the possession of his fathers shall he return (Leviticus 25:39- 41)

I have written two versions of Leviticus: the Reader's Digest version (750 pages) and the full version (4 volumes), called Boundaries and Dominion.


Jesus Annulled the Jubilee Laws

Jesus annulled the Jubilee laws He announced liberation.

And he came to Nazareth, where he had been brought up: and, as his custom was, he went into the synagogue on the sabbath day, and stood up for to read. And there was delivered unto him the book of the prophet Esaias. And when he had opened the book, he found the place where it was written, The Spirit of the Lord is upon me, because he hath anointed me to preach the gospel to the poor; he hath sent me to heal the brokenhearted, to preach deliverance to the captives, and recovering of sight to the blind, to set at liberty them that are bruised, To preach the acceptable year of the Lord. And he closed the book, and he gave it again to the minister, and sat down. And the eyes of all them that were in the synagogue were fastened on him. And he began to say unto them, This day is this scripture fulfilled in your ears (Luke 4:16-21).

If He did not annul Leviticus 25, then the Mosaic law of slavery is still in effect. This is the only passage in the Bible that authorizes inter-generational slavery.

Both thy bondmen, and thy bondmaids, which thou shalt have, shall be of the heathen that are round about you; of them shall ye buy bondmen and bondmaids. Moreover of the children of the strangers that do sojourn among you, of them shall ye buy, and of their families that are with you, which they begat in your land: and they shall be your possession. And ye shall take them as an inheritance for your children after you, to inherit them for a possession; they shall be your bondmen for ever: but over your brethren the children of Israel, ye shall not rule one over another with rigour (Leviticus 25:44-46).

See my comments on this passage in my commentaries on Leviticus 25 and Luke 4:16-21. See also Chapter 4 of my book, Tools of Dominion: The Case Laws of Exodus.

He who denies that Jesus annulled the Jubilee laws owes it to his followers to explain why the Mosaic law's authorization of inter-generational slavery is not still in force. Leviticus 25:44-46 was widely was cited by defenders of the South's slave system prior to 1865. I think it is wise not to attempt to resurrect it now. Except for Jesus' words in Luke 4, there is no explicit or implicit annulment of inter-generational slavery in the New Testament.

In short, a Christian who cites the Mosaic laws governing the prohibition against interest has a lot of explaining to do. He had better understand the implications of his position.

The Mosaic laws governing interest-taking on charitable loans were aspects of the national sabbatical year, including the crucial provision, the six-year term of slavery. This all ended when Israel disappeared as a nation in 70 A.D. These laws were not re-established by the New Testament.

Conclusion: the Mosaic laws governing charitable loans are defunct. There is no more national sabbatical year and no more jubilee year.


Jesus Authorized Interest

In the parable of the talents, which dealt with the Final Judgment, Jesus told of three stewards. A rich man puts them in charge of his money. Then he leaves town. On his return, he requires an accounting. One steward had multiplied his five talents by two to one. The second had multiplied his two talents by two to one. The third had buried his coin in the ground, which he returned to the owner. Here was the response of the owner, who is symbolic of God on judgment day.

Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. Take therefore the talent from him, and give it unto him which hath ten talents. For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth (Matthew 25:27-30).

If charging interest were not legitimate, why would Jesus have used the example of money-lending as a legitimate way to increase capital? Why would He have attributed to God such words of condemnation for not having lent at interest?

Those Christian commentators who say that usury is prohibited, meaning all interest on loans, prefer not to mention the existence of this passage, let alone explain it.


Conclusion

The Mosaic law prohibited interest on a narrow class of loans: charitable loans to fellow Israelites and resident aliens. It did not prohibit interest on all other loans.

Charitable loans were to be annulled in the seventh year, at one time. Loans collateralized by rural land were to end in the seventh seventh year, or jubilee year. The land reverted to the heirs of the conquest generation.

The sabbatical year and the jubilee year system were annulled by Jesus and ended when Israel ceased to exist as a nation.

Jesus authorized interest-bearing loans.

Posted: September 14, 2008


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