The Prohibition to Lend with Interest.
Mishpatim (Exodus 21-24 )
Shemos, 22:24: When you lend money to My people, to the poor person who is with you, do not act toward him as a creditor; do not lay neshech (interest) upon him.”
There are numerous mitzvot in Mishpatim;1 one of the most relevant to our daily lives is surely the prohibition to lend to or borrow from another Jew with interest (known as ribbit). Transgression of interest is so severe that it affects all parties with any level of involvement in the transaction, including the borrower, lender the broker, the lawyer who sets out the contract, the witnesses, the scribe and anyone else involved. Moreover, the lender transgresses six different prohibitions, and the borrower transgresses three.
Yet, Rabbi Pinchas Lind2 notes that when children learn the Torah Portion of Mishpatim they can often tell us in detail about the Jewish slave who had his ear pierced by the doorpost, even though nobody has a Jewish slave nowadays. Yet, in the very same Parsha is the mitzvah of interest, which, if taught at all, is taught as if it is theoretical, even though it’s a Torah mitzvah every day of the year.
One may ask, that the problem of interest may well be relevant for businessmen and even people involved in loans, but otherwise, does it really arise so much in our daily lives? Rabbi Vind answers this question with a series of questions and the answer to these questions:
“Do you own a business, hold down a job, or learn in Kollel? Are you paying a mortgage, living in rented accommodations, or leasing a property to a Jew? Do you ever buy things with a credit card? Pay for purchases, vacation, or debts in installments? Do you ever give or receive postdated checks? Pay monthly utility bills? Borrow anything from a neighbor or friend? Order furniture or electrical items and prepay? Do you ever eat a discount when paying for something in advance, or pay more than the regular price with a payment plan? Do you have any investments or pensions plans? Ever withdraw money from an ATM, but foreign currency, cash checks by a moneychanger, or borrow money from a gemach3? If you answered yes to any of the above, you’d better brush up on your knowledge of the laws of interest, whether or not you live in Israel (the laws apply our of Israel as well.”
Unfortunately, Rabbi Vind points out that knowledge of the laws of interest among the general populace is sorely lacking. On one occasion, he was trying to persuade the manager of a large interest-charging loan company in Israel to get a heter iska4 and he was explaining the severity of interest. The manager then led him outside where a dozen religious customers were waiting in line to exchange their postdated checks.5 The manager said to Rabbi Vind, “I don’t understand, if interest is such a serious transgression, how come so many Torah observant Jews use our services? Why have none of these people ever asked if I have a heter iska?”
The question arises as to why is ignorance of the severe and common Mitzva of interest so widespread? The simplest answer is that it is a very complicated area, involving intricate questions that are confusing to most people. Moreover, even for learned men, the Gemara that covers the laws of interest – Eizehu neshech – is very difficult, and it is not easy to apply the cases in the Gemara to practical situations.
However, it seems that on a deeper level, the negative inclination is very powerful in areas relating to money. The halachic codifier, the Tur, writes, “One must be very very careful in the prohibition of interest.6 The halachic commentator, the Beit Shmuel, notes that the Tur and Shulchan Aruch only use the words ‘very, very’ in just three places, and one of them is interest.7 The Beit Shmuel explains that the reason for this is based on the Gemara that a person has a strong natural desire towards acquiring money8, and therefore an extra effort is required to be careful in the laws of interest. Based on this explanation, it seems that the love of money can cause people to turn a blind eye to the laws of interest when it can potentially hinder their financial situation. As we have learnt, this is a serious mistake, as the Gemara states that one who transgresses the laws of interest is prone to eventually lose all his money regardless of his efforts to amass money.
So how can a person improve his awareness and behavior in this vital Mitzva? The first way is to learn the laws. Rav Vind himself has written many works on interest, including his main work, Brit Pinchas, which gives a clear and thorough outline of the relevant laws. There are also works in English available. Learning such works is necessary at the minimum to give a person an awareness of when interest may apply, and to know when to ask a question to an Authority. When such a case arises, there are now hotlines all over the world where Torah Scholars are available to answer the questions.9
By taking these steps a person can testify that he made the effort to learn about interest so that he can observe this mitzvah and play a part in the renaissance in observance of this formerly, somewhat, abandoned mitzvah.
- Much of the material in this Dvar Torah is from the article, ‘Conflicts of Interest’, Mishpacha, 15th of Teves, 5781, pp.55-63.
- The leading authority in the laws of Interest and the Rabbinical Director of the Beit Horaah L’Inyanei Ribbit.
- Acronym for ‘Gemillut Chasadim’ – an organization that does a specific act of kindness such as lending money.
- A halachic agreement that turns a loan into a partnership by defining the money lent not as a loan, but as an investment in the property or business of the borrower.
- Cashing a postdated check is like taking out a loan. The moneychanger lends the person the money, and he gives the moneychanger a check that is only viable in the future. Because he takes a commission, when the moneychanger cashes the check, he gets more money than he gave, and that constitutes interest.
- Tur, Yoreh Deah, Simun 160.
- The other two are with regards to the prohibitions of bribes, and immorality.
- Makkos, 23b.
- In Isarael, the number is 02-5015920, and in US, the number is 8454938604. Similar programs are underway in England and Mexico.