The Old Testament seems to ban the practice of charging interest, also called usury. What do you say?

Charging interest has historically been equated with “usury”—but this isn’t quite right. Usury is defined as “the lending of money at an exorbitant interest rate, especially in excess of the legal rate.” Usury entails “using” those at a financial disadvantage, and is morally repugnant.

But what does the OT actually say?

  • “If you lend money to my people, to the poor among you, you are not to act as a creditor to him; you shall not charge him interest" (Exod 22:25).
  • “Now in case a countryman of yours becomes poor and his means among you falter, then you are to sustain him, like a stranger or a resident, so that he may live with you. Do not take any kind of interest from him, but fear your God, so that your countryman may live with you. You shall not give him your silver at interest, nor your food for profit. I am the Lord your God, who brought you out of the land of Egypt to give you the land of Canaan, and to be your God” (Lev 25:35-38).
  • “You are not to charge interest to your countrymen: interest on money, food, or anything that may be loaned on interest. You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the Lord your God may bless you in all that you undertake in the land which you are about to enter to possess” (Deut 23:19-20).

Exodus: Notice the Lord’s concern for the poor. Other countries in the ancient world had some laws to protect the vulnerable, but not as thoroughly or consistently as Israel. The poor must not be taken advantage of.

Leviticus: Notice that even a poor resident alien must not be charged interest. Did you know that in some parts of the Ancient Near East, interest rates can be as high as 50%?

Deuteronomy: Yet foreigners can be charged. The assumption is that, with no covenant obligations in Israel, they are primarily interested in commerce. They can afford to pay the interest.

Multiple laws in Torah protect God’s people from falling into poverty: laws about gleaning, the Jubilee, Sabbatical years, and more. Scripture frequently shows us the Lord’s concern for the poor, immigrants, widows, orphans, and other marginalized groups. Shouldn’t we should display the same heart?

So when the OT says that the righteous don’t charge interest (e.g. Psalm 15:5), usury is in view, not normal business ventures. The Lord cares for the poor and the needy, and we should, too. Price gouging, extortionate interest rates, racketeering, etc.—these are wrong. And not only because they are immoral activities, but because they hurt God’s children.

Incidentally, because of a belief that the OT laws on moneylending were still binding, and because these laws were interpreted strictly, not loosely, for many centuries Christians would not take part in the business of lending, or banking—but permitting the Jews to take up work in these areas. That is the reason so many Jews have thrived in the world of finance.

Taking financial advantage of others is always wrong. But legitimate, responsible lending and borrowing, by consent— with or without interest—are not sinful, and may even be an important element in stimulating economic growth and well being.

Further: