READER DISCRETION ADVISED

Warning: The following blog entry was written by a follower of Jesus Christ and contains Scripture passages from the Inspired Word of God.  The author assumes no liability for the reactions of those who may be offended by such unpopular and radical concepts.

As an Evangelical Christian, all the recent talk about subprime mortgages and predatory lending has gotten me to thinking...what must God think of the economic mess we've gotten ourselves into?  Reuters had a news item on this subject a while back and our own Rob Franco wrote a very good blog entry which examined the issue from a religious perspective, but to get God's take on things, I did what I've done all of my life and went straight to the Source--His Word as revealed in Scripture.

Now, I make no claim of being a Biblical scholar, nor do I consider myself a "religious" man. However, I do love the Lord, and have been studying the Bible my entire life (thanks in large measure to my mother, who read Bible stories to me and each of my siblings from birth). It surprises many people when I tell them that God's Word talks more about money than it does about faith, love, sex, or just about any other subject except God Himself.  In fact, money is mentioned in the Bible over 800 times.  Jesus Christ, during His earthly ministry, devoted a number of His parables to illustrating how we should deal with our finances. He teaches that our money really belongs to God and that we are simply the "managers"; He uses money as a test to see how we will handle greater things; "thou hast been faithful over a few things, I will make thee ruler over many things" (Matt. 25:13).  He also warns us that money has tremendous power and cautions us not to let our things own us, that "no man can serve two masters" (Matt. 6:24).

The Reuters article also mentioned a Biblical prohibition on the charging of interest.  This comes from Deuteronomy 23:19, (KJV) "Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anthing that is lent upon usury: (v. 20) Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thy hand to whither thou goest to possess it."

So in reality, the prohibition is not on the charging of interest, per se, but on usury. Merriam-Webster's Online Dictionary defines usury as: "the lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates"; or "an unconscionable or exorbitant rate or amount of interest; specifically : interest in excess of a legal rate charged to a borrower for the use of money".  The Hebrew word used in Deuteronomy is nashakh, "to bite" or to vex. According to Mosaic law, the Israelites were prohibited from taking interest from a fellow Jew on the loan of something that was considered a necessity. It also proscribed the taking of interest in a case of dire need or extreme poverty. In the case of strangers, however, it was permissible to loan money at interest.

The practice of mortgaging lands (sometimes at confiscatory rates of interest) began with the Jews during their captivity in Babylon. In Nehemiah Ch. 5, during the rebuilding of the walls of Jerusalem, Nehemiah rebukes the nobles and the rulers for mortgaging lands at astronomical interest rates. People were desperate for land and the ruling classes were raising the prices far more than people could afford to repay (sound familiar?) Nehemiah called this extortion and came down on them hard for the practice.

As an aside, I found it interesting that modern Muslims still adhere to their ancient prohibitions against charging interest.  I did some research on the Islamic principles of non-interest lending, and they have some pretty creative financing vehicles. According to Wikipedia, instead of making a loan to the buyer, the bank buys the land from the seller and re-sells it to the buyer at a higher price while allowing the buyer to pay in installments.  There are other such approaches, such as sale and buyback, profit sharing, safekeeping and joint venture which basically accomplish the same thing. The Wikipedia article, however, does not address how federal truth-in-lending or financing disclosure laws would apply to such arrangements.

In the New Testament, Matthew 25:14-30 recounts the Parable of the Talents, in which Jesus tells the story of a man who goes out of town having entrusted a sum of money to each of his three servants. Upon his return, the man calls his servants to account for the money he gave them.  Two of the servants give the man his original investment, plus 100%.  The man calls the third servant (who hid his talent in the ground and did not invest it) "wicked and slothful" and that "I should have received mine own with usury." (v. 27) Of course, we know Jesus is using this parable as a spiritual object lesson, but the point is that in terms of trade and business, interest was never forbidden in Scripture, quite the opposite, in fact. The only thing prohibited was extortion and unreasonable interest.

So how does the borrower fit into this Scriptural scenario?

First of all, Scripture refers to debt as bondage. Psalm 22:7 tells us that, "...the borrower is servant to the lender."  While the Bible cites no direct prohibition upon taking on debt, Romans 13:8 states, "Owe no man any thing, but to love one another..."  It would probably be a lot easier for most Christians if the Bible did explicitly proscribe borrowing.  But Psalm 37:21 (KJV) states, "The wicked borroweth and payeth not again: but the righteous sheweth mercy, and giveth."  This clearly indicates that if we incur debt, we should repay it.  "A good name is to be chosen rather than great riches..." Psalm 22:1 (KJV).

Lots of folks saw falling interest rates and rising property values as an opportunity to "cash in", either buying more house than they could afford or cashing out equity to finance such things as big-screen TVs, vehicles and so forth.  As Christian financial adviser Dave Ramsey puts it, "we've used all this money we don't have to pay for stuff we don't want to impress people we don't like."  Many unscrupulous lenders and brokers took advantage of the situation and made loans that they knew in their hearts their borrowers would never be able to repay, then re-packaged and sold portfolios of these loans to third party investors.  Now the whole subprime scheme has blown up in their faces, leaving investors "holding the bag" and borrowers with no alternative but bankruptcy in some cases.

God's moral imperative is clear: lenders have an obligation not only to exact a fair price and rate of interest, but to refrain from extending credit to those who cannot repay, "And as ye would that men should do to you, do ye also to them likewise." Luke 6:32 (KJV); conversely, borrowers have a duty to live within their means and to pay all debts and obligations when due.  We Americans can all certainly use a good healthy dose of common sense when it comes to being good stewards of the resources God has entrusted to us, and the Bible gives us the perfect "study guide".