The Bible, Church Teaching and Debt

Fr. Sean McDonagh, SSC

At a time of chaos on the financial markets, which is now beginning to hit the real economy, and threatens the well-being of millions of people, the first reading on Sunday, October 26th 2008, was appropriate. It warned about usury. It read, “if you lend money to any of my people, to any poor man among you, you must not play the usurer with him/her: you must not demand interest from him/her.” (Ex.22: 24). Israel was a community shaped by its belief that God had rescued them from slavery in Egypt and had obliged them to develop genuine bonds of mutual support within their community. There could be no genuine community if a small proportion of the population owned most of the land and wealth and exploited the poor, starving masses at every opportunity.

Because Israel had experienced Yahweh’s compassion, it is understandable that the laws governing lending would be sensitive to the plight of debtors. Exodus 22: 25,”If you take another’s cloak as a pledge, you must give it back to him before sunset. It is all the covering he has; it is the cloak he wraps his body in; what else would be sleep in? If he cries to me, I will listen, for I am full of pity” was also read on the October 26th 2008. It warns creditors that they must not impoverish the poor. Charging interest was seen as a way of impaling the poor on the treadmill of debt that might deprive them of the necessities of life.

Chapter 24 of the Book of Deuteronomy goes even further and forbids a creditor from acting in a high-handed and haughty way towards a debtor, by entering a debtor’s house to recover a pledge. The creditor is expected to wait outside the house until the debtor carries out the pledge himself. In the biblical perspective, if the creditor entered the house of the debtor without permission it would be seen as an insult to the dignity of the debtor. The same chapter also forbids (Deut. 24: 26) confiscating the means of livelihood of a person as collateral on a debt. This was very understandable in an agricultural society where most people lived from hand to mouth. Where a creditor to take a mill stone as a pledge, this would literally deprive the debtor and his family of a basic life-supporting instrument. The author of Deuteronomy would consider this intolerable, as I am sure he would condemn banks that are foreclosing on loans which they should not have made, and throwing people out of their houses.

Jesus was well aware of the damage which debt does to individuals and society as a whole. The harsh socio-economic realities that obtained in Roman-occupied Palestine at the time of Jesus were marked by indebtedness, heavy taxes, widespread begging and slavery. Many poor country people had to hire out their labor just to get food for themselves and their families. This was the context of Jesus’ preaching which was meant to be good news for the poor. The second petition in the Lord’s Prayer in Matthew’s Gospel asks God to forgive us our debts as we have forgiven those who are in debt to us (Mt. 6: 12). Jesus was well aware that cancelling debt freed poor people from a culture of dependency and gave people hope and real freedom of choice.

The teaching of the early Church, especially from the fourth and fifth century, is full of denunciations of those who prey on the poor though usurious practices. Condemnations of usury continued into the Middle Ages. The Third Council of Lateran (1179) and the Second Council of Lyons (1274) condemned usurers.

The teaching on usury in the Christian Churches began to change in the wake of the Reformation in the 16th century. While Luther, Melanchthon and Zwingli condemned taking interest on a loan, Calvin permitted it, especially if the loan was made to rich people. According to Professor Thomas Neill of St. Louis University in his book, The Makers of the Modern Mind, it is difficult to overestimate the influence of Calvinism in the formation of the modern business conscience. [1]
Gradually even in the Catholic tradition interest on a loan became morally acceptable as long as it was not considered excessive. Maybe in the light of the suffering, hunger, death and political turmoil which this debt-induced crisis is wreaking on the poor of the world, it might be a timely moment for the Churches to revisit the whole question of usury and how debt has been used to drive economic growth.


[1] Thom Neill, 1947, Makers of the Modern Mind, “An the Good Shall Prosper”, Bruce Publishing Company, Milwaukee . (Paperback 2007).