For much of church history, pastoral leaders believed the Old Testament taught that no interest should be charged on any loans. The care and protection for the Israelite working poor was the main rationale for such a prohibition that no interest should be charged on such loans. “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” (Exod. 22:25). Before we go too much further, let me state the obvious. What we are discussing here is the matter of loans that were offered to fellow Israelites who had the potential for paying the loan back. One doesn’t offer a loan to someone who has no means of paying it back; in that case one offers charity. The subject of charity is a different one with which the Old Testament makes provision through other means (e.g., gleaning [Lev. 19:9-10], sabbatical year [Exod. 23:10-11], and triennial tithes [Deut. 14:28-29]). The topic of this blog series is about lending, not charity.
As mentioned, for many years it was understood that the Old Testament taught a complete ban on any interest on loans. For example, Robert Maloney notes, “The Fathers saw the Old Testament prohibition [against usury] as still binding” and that “usury was incompatible with Christian love.” (“Teaching of the Fathers on Usury,” Vigiliae Christianae 27, 1973, 263, 242). Likewise Brenda Ihssen states, “One safely concludes that they [the Greek church fathers] did not consider usury to be either a moral, justifiable, or advantageous action, but in fact, almost unanimously argued against the practice” (They Who Give from Evil: The Response of the Eastern Church to Moneylending in the Early Christian Era [Eugene, OR: Pickwick, 2012], 188).
But a question came to my mind: what about loans for other purposes, such as productive loans for business? Was that excluded as well? So, I thought I would take another look at the relevant Old Testament passages to find out what the Old Testament says about loans and interest. A report of my study, with the details behind my comments here, are available in a 15,000-word article published in the December 2016 issue of Journal of the Evangelical Theological Society, (vol. 59, pp 761-89), “Lending and Interest in the OT: Examining Three Interpretations to Explain the Deuteronomy 23:19--20 Distinction in Light of the Historical Usury Debate.”
I learned that a few matters may confuse the study of this issue. Firstly, for most of history of the term “usury” meant the same as “interest,” until about the eighteenth century, when “usury” began to mean excessive interest, as it does still today. So when reading historical records, when someone after the 1700s stated they are against “usury” they meant they were against excessive interest. For documents before that time, when some one agreed that “usury” should be banned, they usually meant they were against any interest, unless a clarification was made.
Another confusion relates to the Hebrew verb, nāšak, (pronounced as NAHshock) that is translated as “to charge interest.” Earlier Hebrew lexicons (such as BDB) stated there was only one root and it meant both “to charge interest” and “to bite,” so charging interesting was like taking a bite, indicating a negative action. For example, Hillel Gamoran reported in 1971 that, “The most widely accepted view today is that neshek [the noun] was derived from the Hebrew root n sh k, ‘to bite,’ and referred to interest ‘bitten off’ or deducted before the loan was advanced” ("The Biblical Law against Loans on Interest," Journal of Near Eastern Studies 30 , 131).
Yet more recent lexicons (such as the DCH, Dictionary of Classical Hebrew, ed. D. J. A. Clines, 1994-2011, eight volumes) identify two separate roots for this homonym (i.e., they sound the same, e.g., “bare” and “bear”): root I is “to bite” (12 times in the OT, mostly of snake bites), and root II is “to charge interest” (verb used 5x in the OT). So there is no connection between charging interest and biting.
Finally, there are two different Hebrew terms that relate to our particular subject of lending. Lending with interest (nāšak, root II, used 5x), already mentioned is the term used in Exodus 22:25 quoted above. The other term, lending with a pledge (nāšā, pronounced as NAHshah, 12x as a verb), appears, for example, in Deuteronomy 24:10, “When you make your neighbor a loan of any sort, you shall not go into his house to collect his pledge.” It is this particular term, lending with a pledge, that appears in the economic crisis that is recorded in Nehemiah 5: 7, 10. Some English versions translate the verb as lending with interest (e.g., ESV, NASV,NIV). Rather, a better translation is offered by the NET Bible, “Each one of you is seizing the collateral from your own countrymen!” (Neh. 5:7).
The three key passages for our study against charging interest on loans, are in the Pentateuch: Exodus 22:25, Leviticus 25:35-37, and Deuteronomy 23:19-20. The key difference in the passages, and the source of the long controversy was based on the difference between Exodus 22:25 and Leviticus 25:35, which focuses the ban on interest to loans for the poor, where as Deuteronomy 23:19-20, excludes interest on loans to “your brother.” We will take up that aspect of the study in Part 2.