Interest: Payday usury

by | Jul 16, 2023

In this week’s chapters of The Shepherd’s Wife, Pheodora learns from her brother James that her husband is in prison. Last week we learned that Chiram was stopped by a tax collector and borrowed the one denarius assessed. On his way to Caesarea to purchase goats, Chiram was stopped again by the same tax collector. The person holding his loan demanded payment of the loan plus interest. He was arrested for not paying the four denarii, which he now owed but didn’t have.

Pheodora went to her older sister, Damaris, to ask for help. But when Damaris asked her husband, Shimon was hesitant to offer help, worried that the man who sponsored him to become a member of the Pharisees could have a business relationship with the lender. Instead of helping, Shimon suggested that Pheodora sell one of her daughters into slavery in exchange for the debt.

Unable to rely on her sister’s help, Pheodora travels to Caesarea to retrieve goats. Chiram planned to raise their offspring to sell for an upcoming festival to cover their debt. His plan came with many risks, but it was the only way he could imagine a shepherd could raise the amount of money he owed.

There is so much about first-century Palestine packed into this storyline. More important, there is a lot about human nature. In particular, the cascading effect of sin. Taking advantage of the powerless is as old as humanity.

The Federal Funds Rate increased seven times in 2022. Before the increases started, the rate was only one-quarter of a percent. After the latest increase on May 3, 2023, the rate is now 5.25%. So why does this matter to you and me?

First, the Federal Open Market Committee of the Federal Reserve sets the Federal Funds Rate. This committee utilizes the rate of interest charged to banks as levers that help balance the dual objectives of stable prices and high employment. Also known as controlling inflation and motivating job creation. Their decisions affect us because they affect how our local banks treat us regarding the interest they pay us and the interest they charge us for loans.

The rate affects what banks offer, but it has little or no effect on Payday Loans, which already charge predatory interest rates averaging 370 percent in Michigan.

In an article titled “How Do Payday Loans Work?” Tom Jackson concludes, “Payday loans have become the face of predatory lending and high-risk loans in America.” He argues that Payday institutions prey on the poor, writing, “Payday lenders prey on people in desperate economic situations…and anyone else who has limited credit options.”

What does the Bible say about this subject? Plenty.

The legal and biblical term for predatory lending is “usury.” Michigan’s Usury Laws cap interest rates on certain loans, including Payday Loans, but there is plenty of room to exploit persons with limited options.

The Torah forbids charging interest to other Jews but allows interest for loans to non-Jews. This exclusion, over time, created a lot of underserved resentment. But how does this idea apply to Christians? What did Jesus say about usury?

Jesus doesn’t say a lot about charging interest on loans. However, He said a whole lot about taking care of rather than exploiting others. And it isn’t clear whether Christians are exempt from the laws of the Torah regarding the charging of interest.

The Christian Church historically has struggled with this concept. For example, the First Council of Nicaea held in 325 ruled that clergy could not charge interest. This rule was later applied to all Christians.

On the other hand, in an article published earlier this year, Paige Smith. offers a historical perspective on lending, noting that the premise of lending is simply “excess wealth being temporarily transferred to those who can put it to work, with the trust that it will be repaid.” And without lending, she argues, the industrial revolution might never have happened. Smith concludes, “Lending has fueled national, commercial, and industrial growth that would have been impossible otherwise.”

It isn’t really clear whether God has a problem with lending money. Biblically speaking, usury occurs whenever interest is charged. However, my online dictionary connects usury with exploitation.

So when does lending become usury for Christians?

When I searched the word “interest” in Biblegateway, I discovered that the charging of interest receives a lot of attention. Nehemiah offered the most narrative when the Governor stepped in to stop the wealthier from exploiting the poor by charging interest on grain and loans.

Cancel all the debts owed you whether money, grain, wine or olive oil. And give them back their fields, vineyards, olive groves, and houses.
Nehemiah 5:11

The poor complained that some had to sell their children into slavery to pay debts owed to wealthier families. In response, the Governor decreed, “Cancel all the debts owed you whether money, grain, wine or olive oil. And give them back their fields, vineyards, olive groves, and houses right now” (Nehemiah 5:11).

Nehemiah was Governor during the time of rebuilding after returning from exile. Despite God blessing them with abundance, the greed of the well-off created hardships for the less fortunate.

And Jesus had a lot to say about how we treat one another.

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Pastor Tommy


Our series was inspired by and relies on content provided by Angela Hunt. The Shepherds Wife. Jerusalem Road Series. Minneapolis: Bethany House, 2020.

Paige Smith. “A Brief History of Lending.” © Funding Cycle, May 1st, 2023. Retrieved from: link

Taylor Tepper. “Federal Funds Rate History 1990 to 2023.” © Forbes, June 14, 2023. Retrieved from: link

Tom Jackson. “How Do Payday Loans Work?.” © InCharge Debt Solutions, May 31, 2023. Retrieved from: link

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