Does the Old Testament (OT) teach that charging interest on a loan is sinful? Until about the 1500s, most Church leaders agreed that it was sinful, according to Deuteronomy 23:19: “You shall not charge interest on loans [nāšak II, verb] to your brother, interest [nešek, noun] on money, interest [nešek] on food, interest [nešek] on anything that is lent for interest [nāšak II, verb].” Yet the first part of the following verse states: “You may charge a foreigner [nokrî] interest [nāšak II, verb], but you may not charge your brother interest [nāšak II, verb]” (Deut. 23:20).” The question is, on what basis can we explain this difference, that an Israelite cannot charge interest to a “brother” but can charge interest on a loan to a “foreigner”?
The specific emphasis of these blogs is about the topic of lending money to fellow Israelites who had the potential for paying back a loan. Charity to the poor is another important matter in the Old Testament, but beyond the scope of this study. Part 1 introduced the problem, offering background information on some relevant Hebrew terms, and Part 2 identified the key issues and outlined three differing interpretations of Deuteronomy 23:19-20. The contrast between “brother” and “foreigner” can be explained as an:
A. Ethnic status distinction implying a total usury ban,
B. Ethnic status distinction implying a two-tiered ethic, or
C. Economic status distinction implying a contrast between the poor and the merchant.
In this blog the first two views are briefly reviewed.
A. Ethnic status distinction implying a total usury ban. The view with the longest history regarded the OT as teaching that charging interest on any loan was morally evil, taking verse 19 as an absolute statement, combined with how OT spoke about interest in later passages (e.g., Ps. 15:5; Prov. 29:9). Yet this first view is the most difficult to support biblically, in light of the immediate context, since Deuteronomy 23:20 explicitly states that one can legitimately charge interest on a loan to a foreigner. Conveniently, this verse 20 was basically ignored in the discussions (or, it was thought it could be explained away by some means without offering details).
For those who did acknowledge the following verse, the only explanation that could fit with a total usury ban view required understanding the term “foreigner” as one’s “enemy”--just as those who were placed under the judicial ban by God during the conquest in Judges (e.g., Judges 6:17-21). Ambrose (d. AD 397) clarifies this interpretation:
Upon him who you rightly desire to harm, against whom weapons are lawfully carried, upon him usury is legally imposed. . . . From him exact usury whom it would not be a crime to kill. He fights without a weapon who demands usury, without a sword he revenges himself upon an enemy, who is an interest collector from his foe. Therefore where there is the right of war, there also is the right of usury. (De Tobia, 15.51, (from a translation by Lois Zucker, S. Ambrosii De Tobia: A Commentary, with an Introduction and Translation, Patristic Studies 35 [Washington, D.C.: Catholic University of America, 1933] 13).
Accordingly, as in just war theory, one could use immoral means, here, charging interest, to subjugate one’s enemy.
Yet, in this passage, there is no clear indication that “foreigner” should be taken in this sense of “adversary” or “enemy” or as placed under the ban. A prominent term for “enemy” occurs about 24 times in Deuteronomy and is used earlier in that chapter in a context of war and battle (Deut. 23: 9, 14). But “foreigner” is used in Deuteronomy generally to identify a non-Israelite, for example, “You may not put a foreigner over you [as king], who is not your brother” (Deut. 17:15). Therefore, this first interpretation has little biblical support.
B. Ethnic status distinction implying a two-tiered ethic.
This view takes the wording of Deuteronomy 23:19-20 at face value, in which the prohibition against usury on loans only applies on loans to fellow Israelites, to one’s “brother.” In contrast, an Israelite may legitimately charge interest on a loan to non-Israelite “foreigners.” Michael Guttman clarifies this point:
The foreigner could not very well be expected, in a year which the Israelites celebrated as a release year, to remit the debt of his Israelitish debtor. Nor could he be expected to loan money to his Israelitish customer without taking interest. If an equal basis for trading between Israelites and foreigners was to be established it could be attained only in this way; that the restrictions of the release year and the law of interest, which were not binding on the stranger a priori, were also void for the Israelite in so far as trade with foreigners was concerned. (“The Term ‘Foreigner’ (נכרי) Historically Considered,” HUCA 2 , 7).
Thus, according to the view, the OT teaches Israelites to practice a two-tiered ethic on lending and interest, in which one treats one’s fellow Israelite with a higher morality, than a non-Israelite.
Consideration of the larger Pentateuch context raises an important question. How does this view of banning interest on loans to all fellow Israelites, fit with the two other related Torah passages that specifically bans interest only on loans for the poor Israelite brother?
Leviticus 25:35-36: “ 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 [nešek] from him or profit, but fear your God, that your brother may live beside you.”
Exodus 22:25: “If you lend money to any of my people with you who is poor, you shall not be like a moneylender [nōŝe’, participle] to him, and you shall not exact interest [nešek, noun] from him.”
If these two passages limit the prohibition on charging interest to loans to the poor only, on what basis does one explain that Deuteronomy 23:19-20 changes and expands the probation to all Israelites?
Furthermore, sometimes attempting to draw an application may be a good check on an interpretation. Perhaps that dual approach might have worked within a national-political covenant community of Israel in Old Testament times, but how would one contextualize such a two-tiered ethic on this matter today when there are no relevant applicable national-political boundaries? Would we regard “brothers” as all Christians, and “foreigners” as non-Christians? On what legitimate basis would we charge interest to non-Christians, and yet avoid that among Christians? Jesus’ teaching about the Golden Rule is to treat others as we would want to be treated (Matt 7:12). This particular application challenge raises a fundamental concern about the integrity of this interpretative option.
Due to these concerns and questions, I regard the third option--of the contrast in Deuteronomy 23:20 as an “Economic status distinction implying a contrast between the poor and the merchant”--as a view with a better explanation of the biblical evidence. This third interpretation will be developed in Part 4.
(For further details see my article, “Lending and Interest in the OT: Examining Three Interpretations to Explain the Deuteronomy 23:19-20 Distinction in Light of the Historical Usury Debate,” Journal of the Evangelical Theological Society, vol. 59, 2016, 761-89.)