Shabbat Parashat Ki Tetzei 5782

Parashat Hashavua: Is there a Way to Permit Ribbit (Usury)?

Among our parasha’s many mitzvot is the serious prohibition of taking interest on loans (Devarim 23:20-21), which applies not only to the lender but to all who are involved in the transaction.

The Torah relates to loans as an act of chesed and demands of all who can to lend to those in need, as part of a Jewish life, which is based on charity and justice. True, it is permitted and even recommended for the lender to receive guarantees to ensure repayment of the loan. Someone who lends to someone who is capable of providing guarantors and a lien on property and does not do so, puts his money in a precarious situation.

There is another possibility, which can be a great idea to help someone who needs money but has financial opportunity. He can invest in the latter’s business venture. However, he runs the risk of losing money in the process. Therefore, the greatest chesed is to lend money to one who does not have a livelihood so that he can open a business to support his family. To adapt the famous saying: Give a man a fish, feed him for a day; help start a fishing business, you can help him for a lifetime. The Rambam also put the act of lending money to someone so that he will not need hand-outs at the top of his ladder of chesed (Matnot Ani’im 10:7).

For many reasons, some stemming from very difficult financial times, the Rabbis allowed using a heter iska (a document that turns what might have been a loan into a permitted hybrid between a loan and an investment). We find this already in the writings of the Terumat Hadeshen (I:302), one of Europe’s most influential poskim some 600 years ago. However, there are two major conditions for using a heter iska: 1. The heter iska works for a loan done for an investment when the endeavor has the potential to earn profits. Using a heter iska for a loan to finance standard family upkeep is halachically highly suspect. 2. The “interest” the “borrower” pays to exempt himself from an oath about the success of the investment must be realistic, i.e., it is plausible that the investment could have gone well enough to justify it. If it is in excess of the realistic amount, the iska agreement is invalid, the money given/taken is in violation of the prohibition of ribbit, and beit din can deny the lender’s claim to the money.

We have had cases in the batei din of Eretz Hemdah-Gazit in which we have disqualified heterei iska on these grounds. We mention that the Knesset passed legislation limiting the rate of interest in any loan. We praise that step, which protects the weak from the powerful, which is correct in a Jewish state. (We would have been happier if the law had been more in line with Halacha in other ways.)

Let us pray that the number of those in need of tzedaka will decrease and the number of people happy to help those in need will increase. May they be blessed with the Torah’s blessing for generous people: “… so that Hashem will bless you in all that you do in the Land where you are going to inherit it,” and the great psalmist’s blessing, “Goodness and grace shall pursue me all the days of my life, and I will live in the house of Hashem for many long years.”

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