Leviticus 25:36 “Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee”

Bava Metzia 62a: “… that thy brother may live with thee – It was learnt in a braita: Rabbi Elazar says that one can demand a repayment of explicit interest in court whereas one may not demand repayment of that that hints of interest[i].  What is the reason for this?  Because the verse says Take thou no interest of him or increase … so that thy brother may live with thee.  Only that by which your brother lives can be demanded in court.”

Torah Temimah Colloquial Translation on Note #192:

The specifics of the laws regarding interest, even though they are numerous and differ one from the other, they all stem from a single foundation as explained in Bava Metzia 65b:

The main principle of interest is: any payment for safeguarding [money] is forbidden.

This means, any extra payment regarding money whether it be a loan or a sale.  For example, it is forbidden for the seller to say to the buyer: “If you pay cash up front, it will cost you $100, but if you pay you up to such and such date[ii] it will cost you $120.  There is a difference, however, between the two types of interest. Charging interest by way of a loan is interest that pertains something fixed.  This type of interest, referred to as explicit interest, is forbidden by the Torah.  Interest by way of a purchase, however, is only forbidden rabbinically.  It is also called a hint of interest.  The law regarding this type of interest is that one is forbidden from charging this interest, but the court does not force the seller to repay any interest charged in this manner.  Thus if the buyer complains, the court does not extract payment from seller unless the seller wishes to go above and beyond.  This is what is discussed here.

It is well known that in recent times, it is permitted for one to charge interest with respect to business transactions as will be explained.  This is very perplexing for there is not even the slightest hint in the Torah for allowing this.  Furthermore, the basis upon which Chazal saw fit to permit this is unclear.

It appears that our Sages saw a basis and a need for permitting this on the whole.  They investigated the matter until the crux of the prohibition, its basis and essence in the Torah, built and founded upon the principle of “that thy brother may live with thee”.  In the time when Torah was given, the main livelihood and business of the Jews was working the land. This was the basis for their wealth and stature.  One who had a lot of produce[iii] was considered wealthy.  Money was not an integral part of one’s livelihood.  When they loaned money it was not for business nor for acquisitions rather to allow one who was lacking to procure food and clothing just as one would procure these from the profit of his field or his work.  It is understandable that the poor borrower had no intention to pay back the loan with interest.  There was also no recognizable loss to the wealthy lender who loaned without charging interest.  Because they had no financial business, the principle of  thy brother living with thee did not apply.  In the middle ages, when the Israel lost its portion in working the land,  it remained a nation that thrived only on finance.  They could no longer continue the prohibition of loaning without interest now that money was the main basis for their livelihood and commerce, making the matter of interest equal for both the borrower and lender..  Thus the Sages saw fit to permit this.  Because of this principle, they reasoned that the Torah did not completely forbid charging interest.  Thus it appear to me.

The practice for loaning with interest was to write in the legal document that the lender is giving the money to the borrow for the purpose of business as explained in Yoreh Deah 167:1 and 177:2.  The borrower is permitted to invest the money for the profit of the lender based on the estimated gains. The estimated gains went to the lender.  Any profit above the estimated gains would go to the borrower.  If the borrower lost money on the investment, it was forbidden for the lender to collect the estimated gains. 

On the other hand, interest by way of sale, as described above, is very commonplace despite the lack of any provision for a leniency.  This leniency is stated the Tosefta (Bava Metzia 6:4)

A buyer purchasing goods with the intent to pay within 12 months is allowed to ask the seller to reduce the price if the buyer pays the entire amount up front.  In this case there is no concern of interest.[iv]

It requires further study how this is permitted.  There is to say that valuating the transaction if sold immediately as opposed to on credit[v] transforms the sale into a business transaction.

The Nimukei Yosef writes: since “that thy brother may live with thee” is a positive commandment, the court forces the lender to return the explicit interest in the same way the court can force a person to perform any positive commandment.  This is done by beating the person until one agrees to perform the commandment. The court, however, does not have the authority touch one’s assets because subjugation of assets does not apply in this case.  Similarly, this is explained in Yoreh Deah 161:5.  I find it troubling that the court can physically coerce a person, but cannot monetarily coerce the person to return the interest.  After all, if all the ways of Torah are pleasantness (Proverbs 3:17), how can physically coercing a person until one’s soul departs be called pleasant when the court could spare the person at the expense of one’s assets?  I did not find this law in Maimonides code of laws.  The words of the RaN, as cited by the Nimukei Yosef that one physically coerces a person until one’s soul departs (he dies), but cannot touch one’s assets, are extremely troubling to me.  In the first chapter of Ketuvoth, the RaN writes the opposite:

Just as one can physically coerce a person to perform a positive commandment, one can monetarily coerce a person.

Also for charity, the rule is that the court can touch a person’s assets when a person refuses to give charity.  Therefore, it seems to me that this law as it pertains to interest requires in depth study.

Editor’s note: The Torah Temimah was a bookkeeper by profession.  Thus the laws of interest were not only abstract halachah but part of his daily job.  Knowing the particulars of finance and halachah he demonstrates how and when loaning with interest is permitted in our day.  This note also shows his sensitivity.  He is troubled by the those authorities who rule that one may only physically coerce a person to return explicit interest whereas, with respect to fulfilling other positive commandments, one may coerce a person monetarily.  Out of respect to the Shulchan Aruch and the earlier authorities who rule this way he does not dismiss this halachah, yet he notes that further study is required.  There are opinions that hold the halachah represents the will of Hashem.  If one finds a particular law troubling, the problem is not with the halachah rather with the person’s understanding of the halachah.  Here the Torah Temimah shows that is acceptable to question when one finds a particular halachah troubling.  This is not grounds for amending or abolishing the halachah.  Further in depth study is required to make a decision.

Second editor’s note: In this note, the Torah Temimah quotes the RaN as saying that if you illegally took interest from a person, the court can force you to return the money through lashes, even to the point where you might die from the lashes. The RaN also states that in this instance, however, the court cannot put a lien on your property.

The Torah Temimah has two objections to this opinion of the RaN. First of all, it is said about the Torah that “all its ways are ways of pleasantness”. This isn’t pleasant at all! Secondly, the RaN actually contradicts himself in a comment on Ketubos, Chapter 10.

Personally, I find these two objections wonderful. I find it wonderful that the Torah Temimah objects to the RaN’s interpretation because it would violate a “meta” principle that the Torah’s ways must be ways of pleasantness. SECONDLY, there are various technical reasons for rejecting the RaN’s approach. The Torah Temimah is dedicated to promoting and projecting a vision of Torah that is just and “whole”.

[i] אבק ריבית literally the dust of interest

[ii] Whether the buyer pays in installments until the specified date or whether the buyer pays the entire sum at that date

[iii] תבואה literally wheat, but also biblically refers to all produce from the field

[iv] As noted above, the seller may not charge a higher price for paying on credit vs. immediate payment.  Here the buyer is allowed to ask for a reduced price if the seller agrees.  There is no hint of interest in that the seller is losing money on the sale.

[v] הקפה could also be translated as deferred payment