Usury vs. Interest

Discussion in 'Money Talk$' started by ktn4eg, Sep 16, 2007.

  1. ktn4eg

    ktn4eg
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    Can someone tell me what exactly is the difference between charging usury (which seems to always be condemned in the Bible) and charging interest?

    I read somewhere where usury is "excessive" interest, but that seems to be a rather subjective definition, i.e., where does one draw the line between "excessive" and "not excessive"?
     
  2. ReformedBaptist

    ReformedBaptist
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    Hey brother,

    I don't think there is a difference. I think interest charges are usury. It is the collecting of interest on money lent to be repaid. I think that relates to merely the denotative meaning of the word. Words also carry connotative meanings, or implied meanings, either postitive or negative. Usury has had for centuries a negative connotation.

    I have found (using the KJV) 17 verses dealing with usary. I merely did a word search, so I may have missed some Scripture that dealt with usary without using the word itself.

    Ex 22:25, Lev 25:36-37, and Deut 23:19 are laws governing the manner of usary between brethren, in this case from one Jew to another. It, of course, forbids it.

    Deut 23:20 permits a Jew to lend with usary to a stranger (non-Israelite) but again, not to a brother.

    Neh 5:7 is a prophecy against Israel for breaking this law.

    Psalm 15:4-5 has the innocent and poor in mind, but does seem to speak generally, however it cannot contradict the Word of God. God permitted usary to non-Jews.

    In Eze 22:12 we read "In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord GOD."

    This prophecy is against Israel and so they have conducted business greedily, with extortion, and broken the law of God with their usary toward one another.

    Given that the Lord permitted the Israelites to charge usary to non-Jews I do not see the prohibition as being morally wrong. i.e. Murder is morally wrong. It wouldn't be ok for an Israelite to murder, or commit adultery with a non-Jew just because they weren't Jewish.

    In application of this I have made a personal decision that if I lend money to a Christian brother or sister to not charge them interest. But usary as a matter of business is not wrong. i.e. lenders, bonds, et. If I have borrowed money from a brother in Christ, I will repay it immediately. But I am certain my credit card company is quite pleased to charge me interest on money I borrowed from them and not repay it for many, many years!

    Does that add some clarification?
     
  3. webdog

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    Good post, RB :thumbs:
     
  4. webdog

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    An illustration between usury and interest...

    If a brother at church needs money...really NEEDS the money to pay bills, buy food, etc. due to a layoff, death, illness, etc...and I charge him interest on the money I lent him, that is usury.

    If a brother is in good financial shape and WANTS to borrow money to purchase a foreclosed home or car...and I charge him interest on the money I lent him, that is fine, and should be expected.
     
  5. ktn4eg

    ktn4eg
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    Thanks for enlightening me on this topic.

    Any others out there care add your two cents' worth?
    (I won't even charge you for it! :laugh: )
     
  6. Zenas

    Zenas
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    ReformedBaptist, you have explained this issue quite nicely. I find it ironic that the most needy debtors always have to pay the highest rate of interest on what they borrow while the wealthiest debtors get the really good deals. I have many banker friends and don't fault them for what they do, but there can be no doubt that misery is their stock in trade. If you disagree, go and sit through a session of bankruptcy court some time.
     
  7. ReformedBaptist

    ReformedBaptist
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    Is it percieved risk? Are the more needy debtors percieved as being a riskier loan and so the lenders are charging more interest? The wealthier debtor would be percieved as being more able to repay the loan and thus less risky to the lender, so they charge lower rates.

    There are a lot of foreclosures in the market today because of loans made to people who should not have received them. I think this is due to both the lenders and the rating agencies. The lenders went to extreme lax underwriting on who they made loans to, even sub-prime loans, and the rating agencies rated those subprime loans (which are sold as securities) the same way they rated other loans, making investors in those loans (mortage-backed securities, hedge funds) comfotable buying the loans.

    While a lot of home-owners are getting hurt through this, so are lenders that are going bankrupt. Both should have known better. Of couse, those loan portfolios are being sold at rock bottom prices now. I saw a news articles that showed a $150M in loans sold in bankruptcy for $50M !!!!!!!!!!1

    Where there is volitility...there is opportunity.
     

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