The morality of payday loan firms is under the spotlight. But what do faiths say about money lending and interest?
In general, usury defined as the lending of money at high interest rates, is frowned upon by religion. The three Abrahamic faiths – Judaism, Christianity and Islam – take a very firm stance against it.
Several passages in the Old Testament condemn usury, in particular when lending to the poor and destitute. This led to lending money at interest being forbidden in the Jewish community, explains Dr Alastair McIntosh from the Centre for Human Ecology: “In Jewish tradition charging interest was forbidden within the community, but it was permitted to outsiders.”
My Ph.D is in Holocaust History, and so as part of the background I had to do a lot of study of the history of antisemitism. So from this perspective may I respectfully but loudly disagree with Dr McIntosh? First of all, we might note that in many societies one after another various occupations were closed to Jews by law. Medicine and dealing in money were usually left open. Not surprisingly, Jews did what they could. (They had a long-standing reputation as physicians.) Second, I want to query the reference here to gold. Certainly from the 16th C onwards the Jewish community was facilitating international trade via a nascent banking system, using their intra-communal contacts. But this was usually done by letters of credit. To speak of trading in gold seems to me to come perilously close to an ancient stereotype. Finally, the reference to them having to flee persecution, while perfectly accurate, again plays unconsciouusly into an ancient stereotype of the rootless Jew, tied here to the picture of them clutching at gold ready to move on at the drop of hat. No, nein and nyet. The pogroms (eg those associated with the Crusades, such as 13th C Rhineland) could not have occurred unless the Jews were actually settled and part of their local communities. Most could not and did not flee.
The amount of interest is related to the ability of the borrower to repay the loan and to the availability of credit. Legal limits on the amount of interest tend to exclude the worse risks from borrowing except on security – thus pawn shops. Loans within the community depended on the community for security. In Baltimore I knew of the Hebrew Free Loan Society which made small loans to members. Credit unions operate on the same principle. But the nature of human sin in such that some government regulation is required.
#2–Then why does Macy’s charge 22% on its credit cards? Of course, at some level your statement is correct. Because I have the ability to get other credit, I don’t use my Macy’s credit card.
Terry, don’t know if you have ever visited the Medieval Museum of Crime and Punishment in Rothenburg Ob der Tauber. There is a remarkable collection of legal records there. One is a record of the 12th or 13th C.trial of a gang of Gentiles who attacked some Jews. The trial resulted in the conviction and execution of the Gentile ringleaders.
BTW, I refuse to use the term “anti-Semitism” because it is mostly used incorrectly to mean anti-Jewish. The error is especially obviously when Arabs -who are Semites- are accused of anti-Semitism. Just one example of the decline of precision in our language.