An acquaintance of mine owned and operated a small finance company years ago.
He loaned money to individuals who couldn’t get a loan from a bank because of various reasons–inconsistent employment, insufficient annual income, bad credit history and so on.
Of course, he charged them a higher interest rate than the banks, but the people he loaned to were a greater risk.
Because there was a higher overall default rate among his clients, he had to charge everyone higher interest in order to be profitable.
That’s accepted practice even among banks. Higher risk clients pay higher interest rates for their loans.
One day I went into his office and in the course of our conversation, I asked him some questions about his business.
At one point he told me, “The key with these people is to keep them right at the edge of default. You want them paying enough to cover the interest, but not so much of the principle that they ever really pay it off.”
“If they get behind on their payments, you loan them some more, but at a higher interest rate. You do whatever you need to keep them paying on the loan. Eventually they will default, but not until after you’ve received interest that is two or three times as much as what you’ve loaned them,” he said.
I sat there stunned by his business model. It was all perfectly legal, yet it felt very wrong.
I wish I had said something–and should have, but never did. Maybe it was lack of courage, but also I couldn’t articulate that feeling of wrongness into a logical, persuasive argument on the spot.
Perhaps if I had been reading the Bible a little more thoroughly, I would have found the words, because the Bible has much to say about these kinds of practices. A few central texts include:
â— “If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not exact interest from them” (Exodus 22:25).
â— “You shall not charge interest on loans to another Israelite, interest on money, interest on provisions, interest on anything that is lent” (Deuteronomy 23:19)
â— “If a man is righteous and does what is lawful and right … [he] does not oppress anyone, but restores to the debtor his pledge, … [and] does not take advance or accrued interest” (Ezekiel 18:5,7-9).
Too often I have set these texts aside, justifying my decision by suggesting that they only applied to ancient Israel and are unrealistic in a modern economy.
But then there is this: “But love your enemies, do good, and lend, expecting nothing in return” (Luke 6:35).
This verse was printed in red ink because Jesus said it. It’s harder to ignore what Jesus says. Though we do it all the time, it’s harder to justify.
These verses don’t just prohibit the charging of exorbitant interest but the charging of any interest. So what’s the issue? Part of the answer is found in Nehemiah 5.
A famine has ravaged the land, and many people have had to borrow against their fields and vineyards in order to have money to buy food to eat and seed to plant as well as funds to pay the king his tax.
The result is that those who needed to borrow money had become slaves to their own people.
In response, Nehemiah gathered the nobles and officials who were making the loans and charging interest, and they agreed to return the interest gathered and not charge any more.
So that’s one part of the issue: taking people who are already in a tight spot and making it even tighter, essentially making them slaves while the lenders get even richer.
When a helping hand was needed, what those in need received from the wealthy who had enough money was excessive interest charges on loans taken out to meet basic needs.
There is a deeper principle at work here–no one should enrich himself or herself from the suffering of another person.
It’s all right to make a living wage providing a service to a person in need. No one expects roofers to repair storm damage for free, doctors to treat patients at no cost, pharmaceutical companies from earning from the drugs they sell to pay everyone a good living wage, or even lenders to provide money without any interest.
But anyone in any industry who seeks to get rich, sometimes excessively so, by taking advantage of human suffering may gain wealth, but only at the expense of their humanity.
And that is what Jesus is guarding against, in keeping with the Hebrew law and prophets. They are protecting both the people in need and those providing help.
Larry Eubanks is the pastor of First Baptist Church of Frederick, Maryland.