Tuesday, 15 March 2011

JVO: Charging Interest

Jewish Values Online (jewishvaluesonline.org) is a website that asks the Jewish view on a variety of issues, some specifically Jewish and some from the world around us -- and then presents answers from each of the dominations of Judaism. Nishmablog's Blogmaster Rabbi Wolpoe serves as an Orthodox member of their Panel of Scholars, offering answers from our perspective.

This post is part of a weekly series on the Nishmablog presenting the questions to which he responded and the answers that he gave.

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Question: Please explain the prohibition that a Jew should not charge a Jew interest on a loan and the practicality of this prohibition in a modern world.

Rabbi Wolpoe's Answer
Let's divide this into 3 parts

"Please explain the prohibition.."

A:  From an Orthodox perspective this is a command from Divine Torah, and we can never be certain of its definitive reason or reasons.

Nevertheless, we have a rich literature that does offer several rationales - EG see Sources Below esp. Hinuch 66-68


Q: "...a Jew should not charge a Jew interest on a loan.."

A: The Torah says we may charge a Gentile interest - apparently because they charge US interest

We must recall that the Torah presumed a Nation-State of Israel that consisted of mostly Jews and the Quasi-Convert known as a "Ger Toshav". Our exilic experience has called for some modfications from that ideal.

My own personal philosophy is based upon a simple economic principle [pun intended] - namely that the entire people of Israel are construed as family and therefore we act in a co-operative manner. That implies helping out our brothers and sisters with interest free loans.

I'm guessing - at least until the advent of the Messiah - that we do not construe Gentiles as part of this family, though of course they may join us of their own free will.

Note: It remains a gray area. Do we charge Gentiles interest as a form of reciprocity, or because they fail to be have close enough "kinship"?

Q: "...and the practicality of this prohibition in a modern world."

A Rabbinic literature seems to construe the "interst-free loan" as support for family needs.  Therefore, when a business loan is needed, a "workaround" or cicumvention has been formulated, that is a "heter iska" or a permit for business

Usually mortgage loans are included as "business loans"

In order to make modern commerce possible, there is a moderate loophole that would afford a Jew to lend and borrow from a fellow Jew.

Another "loophole" would be to emply a Gentile as a middleman. Thus Abraham would lend to John who then in turn would lend to Isaac.  Don't try this by yourself at home - without rabbinical supervision!   :-)

Summary:
There is often a natural tension between Torah ideals and pragmatic reality.  In Traditional Torah Judaism, rabbis usually have tried to steer a middle course in avoiding either extreme.

Shalom
RRW

Sources:
For the Torah Point of View see -

Torah -
Parshat . Mishpatim
Ex. 22:24-26

Parshat. R'eih
Deut. 14:22 - 15:18

See Rashi on Both Sections.

Also
See Sefer HaChinuch
66-68, 475-482


For Practical Laws and Customs -

Kitzur Shulchan Aruch
Chapters 33 & 34,
Also 179-189 esp. 179 & 180

 

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