- Revd Ben Cooper
The Pandemic Loan Sharks
There was a piece in The Guardian newspaper a few weeks ago describing how people struggling financially because of the pandemic have found themselves borrowing money from people they thought were friends, but have then found themselves struggling under crippling debt. One single mother borrowed £50 from another mother at herhild’s school, which quickly turned into thousands of pounds of debt and violent threats, forcing her to go into hiding. The interest exacted in such deals is eye-watering. It’s common to expect ‘double bubble’ interest at short notice, for example — the amount of the original loan, plus the same again on top.
What should the Christian response be? One accusation is that Christians have gone soft on this issue. The Bible, it is said, is against lending at interest. The church fathers were uniformly against lending at interest. Most of the Reformers were vehemently against it, including Luther and, yes, our very own Hugh Latimer.
Calvin, on the other hand, wasn’t so sure. Yes, he said, we can see that some lending is damaging. But some isn’t. Some is mutually beneficial, like many other economic exchanges — ‘no worse than purchase’. And it’s Calvin’s view that has prevailed, with very few protestant Christians today advocating a total ban on lending at interest. But is this because he was right? Or have we gone soft, as some say? Or, as others say, have we bought into a progressive view of ethics that allows us to change our minds on what the Bible says about lending at interest? (Such that we could legitimately change our minds on several other contentious issues too.)
Now, it’s very true that the vast bulk of biblical material on lending at interest is negative. Ezekiel 18:5–13 is especially strong, where the prophet puts lending at interest alongside all sorts of other idolatry and wickedness. This is just preaching what the Law says (Exodus 22:25–27; Leviticus 25:35–38), and wisdom confirms (Proverbs 28:8).
In all these cases, it’s obvious that the reason why lending at interest is so bad is that it’s exploitative – profiting out of others’ hardship and trapping them in their hardship (as in the contemporary examples described in The Guardian). This does then leave open the question of what to do about lending when it can be shown to be non-exploitative. Indeed, there is a famous exception to the biblical prohibition on lending at interest in Deuteronomy 23:19–20. Like the other biblical texts, this prohibits lending to a brother Israelite. But it also says, ‘You may charge a foreigner interest’. I argued in The Ethics of Usury (Latimer Study 77) that the case law was at this point picking out an example of lending and borrowing that was mutually beneficial, and not a case of someone profiting from the poverty of another. Such lending, the Bible suggests, is a good thing.
It is understandable to react to news of loan sharks and exploitative lending by wondering if we’ve got it right about lending at interest. Should we go back to the scolding, universal prohibition on usury of the church fathers? But better just to do our Biblical ethics well. Part of the issue here is that the circumstances have changed. Even by Calvin’s day the opportunities for constructive lending and borrowing were much greater than they had been in the ancient world. It would be foolish to intervene in lending and borrowing arrangements that are genuinely beneficial to both parties and enable innovation and growth. On the other hand, when we do come across exploitative lending like that identified recently by The Guardian newspaper, may the Prophet Ezekiel be our guide and example in how to respond.
 The Guardian, ‘Loan sharks at the school gates, nude photos as security: how desperate people fall into the debt trap’, 21/2/2022.  John Calvin, ‘Letter to Claude Sachin,’ in Calvin’s Ecclesiastical Advice (Edinburgh: T&T Clark, 1991): 140.