A: Many Scriptures prohibit the charging of interest or usury in certain circumstances.
For example, Exodus 22:25 states, in the Authorized Version, “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.”
The Hebrew word for “usury” is “neshek” or “neshech” and has the meaning of “biting” (Young’s Analytical Concordance). Its root word is “nashak” or “nashach.” Strong’s Exhaustive Concordance, under Nos. 5391 and 5392, gives the following explanation: “…to strike with a sting (as a serpent); fig. to oppress with interest on a loan.”
Soncino points out: “That which ‘bites’ (nashach) like a snake. The victim of a snake does not at first feel the bite, but soon the wound swells and spreads over the whole body; likewise it is with usury: at first the borrower does not feel its pinch, but little by little it grows until it amounts to a crushing sum. Do not impose usury on the borrower in consideration of an extended time limit for repayment.”
Commentaries disagree whether any kind of interest is prohibited, or just excessive interest (what we would call today “usury”). Also, depending on the understanding of the translator, the words “neshek” and “nashak” are rendered with “interest” or “usury,” respectively. While the Authorized Version translates “usury,” most other translations say “interest,” but not consistently so. Sometimes, they also say “usury.” In addition, the NIV translates “neshek” in Exodus 22:25 as “interest,” but states in a footnote, “Or excessive interest.”
In any event, the context of the prohibition is “exacting” or “demanding” interest or usury from a NEEDY or POOR Israelite. Although a few Scriptures, if read in an isolated way, may suggest that charging an Israelite with any kind of interest is prohibited under any circumstances, reading all the passages together shows that charging interest is only prohibited to a POOR or NEEDY Israelite.
We quoted Exodus 22:25, clearly involving a POOR Israelite. Note also Leviticus 25:35-37:
“If one of your brethren becomes POOR, and falls into POVERTY among you, then you shall help him, like a stranger or a sojourner, that he may live with you. Take no usury [Hebr., “neshek”] or interest [Authorized Version: “increase”; Hebr. “tarbith” or “tarbuwth”; meaning “multiplication,” according to Strong’s Exhaustive Concordance of the Bible, No. 8636] from him… You shall not lend him your money for usury [Hebr., “neshek”], nor lend him your food at a profit” [Authorized Version: “for increase”, Hebr. “marbith” or “marbiyth”; i.e., “increase, abundance, multitude,” according to Young’s Analytical Concordance of the Bible; see also Strong’s, No. 4768]. This passage, too, only applies to a needy or poor Israelite.
A passage in Deuteronomy 23:19-20, if only read by itself, might give the impression that charging an Israelite interest is prohibited under any circumstances, even if the Israelite is not poor or needy. We read, in the Authorized Version, “Thou shalt not lend upon usury [Hebr., “nashak”] to thy brother; usury [Hebr., “neshek”] of money, usury [Hebr., “neshek”] of victuals [or food], usury [Hebr., “neshek”] of any thing that is lent upon usury [Hebr., “nashak”]: Unto a stranger thou mayest lend upon usury [Hebr., “nashak”]; but unto thy brother thou shalt not lend upon usury [Hebr., “nashak”]…”
However, from the context with the other Scriptures already mentioned, and still to be mentioned, this prohibition only applies to a POOR Israelite. See, for example, what God says in Psalm 15:5 (Authorized Version): “He that putteth not out his money to usury [Hebr., “neshek”]…shall never be moved.”
Taking this Scripture out of context, without reading it together with other passages, one could conclude that one could never lend money out for interest (or usury), not even to foreigners. As we have seen, however, in other passages, charging foreigners interest is permitted.
WHY does the Bible permit charging interest to foreigners?
The ancient Israelites, not being a commercial people, were not accustomed to lending amongst themselves for the purpose of business, trade and commerce. “But the case was different with foreigners, who, engaged in trade and commerce, borrowed to enlarge their capital, and might reasonably be expected to pay interest on their loans” (Jamieson, Faussett and Brown, Commentary on the Whole Bible, 1961, p. 159, commenting on Deuteronomy 23).
The New Bible Commentary agrees with this distinction, when it comments on Deuteronmy 23:19-20, as follows: “Loans to foreigners were usually of a commercial nature, and thus an interest charge could be levied without objection. When the loan was from a rich man to his poor neighbor, the imposition of interest violated the law of brotherly love.”
Hasting’s Dictionary of the Bible also concurs. In its article, “Usury, Interest, Increase,” it states: “The loans here contemplated are therefore not advances required for trading capital, but for the relief of a poor ‘brother’ temporarily in distress, who would otherwise be compelled to sell himself as a slave.” In its article, “Trade and Commerce,” Hasting’s points out: “The Israelites seem to have become merchants only relatively late, and commercial dealings were for a long time in the hands of foreigners.”
Passages similar to Deuteronomy 23 and Psalm 15 can be found in Jeremiah 15:10 and Ezekiel 22:12 and must be read with all of the other Scriptures. Therefore, taking all the passages together, the Bible only prohibits to charge a brother interest, if that brother is poor or needy.
On the other hand, the spiritual intent of the Scriptures also clearly shows that no one should ever charge exorbitant amounts of interest or usury to anybody, including “foreigners.” This kind of greed is clearly condemned in the Bible. Further, the spiritual intent of those passages also prohibits to charge a poor and needy “foreigner” interest — that is, no interest should be charged to a poor “foreigner” when a loan is given to him to provide for his necessities. This means for us today, a true Christian should not charge any poor person interest for a charitable loan, whether or not the person is a Church member (Galatians 6:10).
Let’s review a few more Biblical passages regarding the prohibition to charge interest to an Israelite. Notice Proverbs 28:8 (Authorized Version): “He that by usury [Hebr., “neshek”] and unjust gain increaseth his substance, he shall gather it for him that will pity the POOR.” The context shows, that the lender exacted usury from a poor person, rather than showing mercy to the poor by not charging him interest.
In addition, note Ezekiel 18:8 (Authorized Version), “He that hath not given forth upon usury, neither hath taken any increase…, he is just, he shall surely live.” Taken all by itself, this passage could cause misunderstanding. When we read on, the meaning becomes clear. It is stated in verses 14-17, “Now, lo, if he begat a son…that..hath given his bread to the hungry, and hath covered the naked with a garment, that hath taken off his hand from the POOR, that hath not received usury nor increase…, he shall not die…”
Another example can be found in Nehemiah 5:1-13. Verse 10 says specifically that the Jews should “leave off this usury.” The context is, that some Jews charged interest to other needy and poor Jews (vv. 2-5).
The New Testament confirms the understanding that charging interest under certain circumstances is not wrong.
In Matthew 25:27, Christ tells the unprofitable servant that he should have deposited the money with the bankers or “exchangers” (Authorized Version), so that the returning master would have received the money loaned to the servant “with usury” or “interest.” The Greek word here is “tokos,” and is defined by Young’s with “offspring” or “usury.” Strong’s writes, under No. 5110, “interest on money loaned (as a produce) — usury.” In the parallel passage in Luke 19:23, the word “tokos” is used again and translated as “usury” in the Authorized Version and as “interest” in most other renditions.
Without entering the debate whether the translation “usury” or “interest” is appropriate, we see, nevertheless, that Christ used, in this parable, the concept of gaining interest in an approving way. Since Christ spoke this parable to the Jews, some of the bankers or exchangers giving interest would have been Jewish. As commentaries, such as Rienecker, point out, at the time of Christ, many of the bankers were also Jewish “moneychangers” (Matthew 21:12; Mark 11:15; John 2:14), as well as those who collected the temple tax (Matthew 17:24). So, in Christ’s mind, it would not have been a violation of Old Testament Scriptures to have Jewish bankers or “exchangers” grant Jews interest for loans. This is understandable, as the Jewish bankers were not “poor” or “destitute,” so that Jews loaning them their money were not prohibited to receive interest from them. This means that it is not Biblically prohibited that a Christian lender receives interest from a Christian borrower for a loan, as long as the loan was given as a business transaction.
Unger’s Bible Dictionary,” ed. 1966, page 1129, para. 1 and 2, captures this distinction well, when it states: “The Israelites not being a commercial people, money was not often loaned for the purpose of business, but rather to aid the struggling poor. This last is the only kind of usury forbidden in the law…The taking of usury in the sense of a reasonable rate of interest for the use of money employed in trade is different, and is nowhere forbidden; and is referred to in the New Testament as a perfectly understood and allowable practice.”
In an old (undated) document which had been published by the Worldwide Church of God, under Herbert W. Armstrong, on the issue of charging interest, the following conclusion was given, agreeing with the foregoing, “Based on all this information, the Church concludes that the prohibition on receiving interest applies to charitable loans, not to business investments in which the loan will be used to gain increase. When the loan is earning an increase, it is only fair that the lender receive a fair share of that increase as interest… The biblical instructions concerning usury… pertain to the poor and needy… True Christians should not charge the poor interest on a loan that is intended to provide necessities. However, a loan as a business deal — and this would include buying a home — is an entirely different matter.”
To summarize, the ancient Israelites were forbidden to charge interest to a poor Israelite. However, they were not forbidden to charge reasonable interest to a foreigner (as foreigners were usually receiving loans in a business context). They were also not forbidden to charge reasonable interest to another Israelite if the loan was not given to help a poor and needy brother, but as a business transaction, in a commercial context.
These same principles apply today regarding Church members. Judging from the spirit of the law, it would seem inappropriate for a converted Christian to charge a poor and needy person interest, whether or not the poor person is in the Church (Galatians 6:10). On the other hand, it would not be wrong for a converted Christian to charge another person or institution interest for a loan strictly given in a business context.