Is charging interest sinful?
A bid to reconcile Scripture and the modern economy.
– C.S. Lewis, "Mere Christianity"
In an age of subprime mortgages, credit cards, and payday lending, it's hard to imagine that charging any interest was once considered immoral. Yet like many ancient moral leaders, Moses commanded, "If you lend money to any of my people who are poor, do not … require him to pay interest." (Exodus 22:25, Good News Translation).
Interest is what fuels savings and investment. Without interest, borrowing – from home loans to bonds – would virtually disappear. Most of us today don't lend to the poor. Rather, we "lend" to the very rich: When we buy bonds or set up a savings account, we give banks and government our money, expecting a modest rate of return in exchange. Does Moses' injunction apply in such cases? If so, is our modern economy intrinsically sinful?
After 20 years of thought, prayer, and practice in the financial industry, I'm convinced that interest can be an important part of financial and spiritual blessings. But a distinction must be made between lending for charity and lending for investment. When we help a neighbor in need – and the Bible says we are obliged to do so! – we ought not seek financial profit. But when we lend to boost a neighbor's productivity, a return on investment is sound.
This distinction isn't always recognized, which explains the usury laws and prohibitions on "excess" profit that persist today. An extreme example comes from Robert Wuthnow's book, "God and Mammon in America." In 1639, merchant Robert Keayne was censured by his Boston church and convicted in court for earning 6 percent profit, two points above the limit.