“If you lend silver to my people, to the poor person among you, you must not be like a creditor to him; you must not charge him interest. If you ever take your neighbor’s cloak as collateral, return it to him before sunset. For it is his only covering; it is the clothing for his body. What will he sleep in? And if he cries out to me, I will listen because I am gracious.” (CSB – Read the chapter)

A huge portion of our economy is built on interest. Everybody changes interest for everything. The only reason a business might not charge interest is if they are running a special sale in hopes that enough extra people will buy something to make up for the interest they are losing from a small number buying. The practice of charging interest on loans has been around for a long time. For much of that, though, one group of people in particular considered it a bad thing. This verse has a whole lot to do with why. Let’s think through what we see here, what it means, and what we should do with it today.

Economics is a complicated science. At least, it’s always been a mystery to me. For some people it just clicks. I let those kinds of people do my taxes for me. Generally speaking, though, when someone starts talking about matters related to money, my eyes go cross, and my mind starts wondering. I may nod along in the moment, and I may even think I understand the words that are being said, but none of it is going to stick. And if I’m forced to explain it later, I won’t likely be able to do it. I’ll be like the person at the end of the line in a game of Telephone. But I do at least understand this: Interest is the way institutions that loan money make money.

When a financial institution loans out money, the total amount of money they have available to loan goes down. If I have $100, and if I loan you $100, then I don’t have that money to give to anybody else until you give it back to me. And if you give back to me just $100, then I can only loan $100 to the next person. But if I loan two people $50, and charge them each interest, then when they pay me back, now I have more money to loan to more people who need it for some reason or another. Depending on the amount of interest I charge, I not only have more money to loan to more people, but I can also make a little bit of money for myself in the process. Everybody wins.

This principle also works the other way around. If I give my money to a bank to hold onto for me, that bank is going to use that money to loan out to other people along the lines we just talked about. Essentially, I am providing them a service like this. Well, in return for my providing them this service, they agree to pay me a certain amount of interest each month for the privilege of being able to use that money to do other things while they have it. Over time, they make money for me using my money. And depending on what I agree to let them do with my money and how great the likelihood of their losing some or even all of it is, they’ll agree to pay me even more money for the privilege of using it. We call this investing.

This is how modern economies have worked for a long time. In order to gain the benefits of this kind of a system, though, you have to have some money to start with. In fact, you have to have extra money. You have to have enough money to pay all of your bills and living expenses and to put in the bank or entrust with some other investment institution. Not everybody has that. In fact, a lot of people don’t. Many people don’t have enough to be able to get their bills and living expenses fully covered. These folks are in the extraordinarily difficult position of having to borrow money in order to live. They don’t often need a lot of money (granting that’s a wildly relative idea), but they do need some.

Fortunately, there are institutions that specialize in making small loans to help people cover the gap between now and when their next burst of income arrives. Unfortunately, many of these institutions are not owned and operated by noble souls who are looking to serve a poor community in order to help improve the lives of the people living there. They are owned and operated by scoundrels who are looking to exploit a community in need by taking advantage of the fact that they need more money than they have in order to get by.

Now, this certainly doesn’t apply to every payday loan institution. Some are run by very honest people. The challenge is that in order to continue to exist, institutions like this need to be able to make money. They have costs just like every other business does. And, the people who use their services often have a genuine need for them. Sometimes customers are in a pattern of bad financial decision making and they need help breaking out of that cycle, but not many are genuinely struggling to make ends meet in spite of their best efforts. They need the help. But in order to make money, loan agencies have to charge interest. They have to charge enough interest so that they can make enough money to cover their expenses and continue to operate. And if a borrower cannot pay back the money they have taken, the lenders are contractually entitled to get their money back by other means. It really is a vicious cycle.

In this passage, these kinds of situations are very likely not what God had in mind. That’s rather explicit right from the beginning. “Don’t be like a creditor,” He said. That doesn’t necessarily mean there are anything wrong with creditors, banks, loan agencies, and the like. He means that in your personal relationships when you loan money to one another as a means of generously helping your neighbor through a potentially tough spot, you shouldn’t act like that. You are not a creditor. You are a friend and neighbor loaning a friend and neighbor money to help him through a tight spot. If you feel the need to get some kind of collateral to make sure you get your money back, number one there’s already something that has gone wrong. Number two, don’t take something that he is going to need before he is able to pay you back. That has the effect of putting him in a doubly tough position. He’s already in a tight spot by virtue of the fact that he is having to borrow money. Don’t make things worse by adding extra need on top of that which already exists.

It is the very personal nature of what God is talking about here that gives us a clue as to what we should do with this since the law itself doesn’t apply to us. The principle we are seeing here is that God wants His people to be generous and compassionate toward one another. This fits squarely in line with Jesus’ command to love one another after the pattern of His own love for us. He generous laid down His life for our sake. He compassionately helps us to the place where we are willing and able to accept His offer of eternal life. Love is patient and kind, remember?

So, does this mean we shouldn’t worry about opposing unjust loan practices by unscrupulous lenders? Of course not. God is a just God and wants us to be working to see His justice brought forth every opportunity we have. He’s talking about personal relationships here. In our personal relationships we should be generous and compassionate. When we get that right, we will be on track with His character and kingdom. That’s a very good place to be.