Psalm 15:5 forbids charging interest; how does this align with other Old Testament passages that allow interest to foreigners (e.g., Deuteronomy 23:20)?

Definition and Context of Psalm 15:5

Psalm 15 describes the character of those who dwell in the presence of the LORD. Verse 5 specifically commends the one “who lends his money without usury and does not accept a bribe against the innocent. The one who does these things will never be shaken.” In ancient Israel, “usury” (often understood as charging excessive interest) or uncharitable lending to a fellow Israelite in dire need was viewed as an exploitative practice. The psalm underscores integrity and mercy within the covenant community.

Psalm 15 highlights godly behavior in relationships and financial dealings. It reflects Israel’s core values of compassion, justice, and unity among its people. The instruction to avoid entangling struggling neighbors with crushing debt emphasizes moral uprightness, love for neighbor, and a readiness to help the needy.

Deuteronomy 23:20 and the Permission to Charge Interest

Deuteronomy 23:20 states, “You may charge interest on a loan to a foreigner, but you must not charge your brother interest, so that the LORD your God may bless you in everything to which you put your hand in the land you are entering to possess.” This passage allows for charging interest to “foreigners” (non-Israelites) but forbids charging interest to “your brother” (fellow Israelites).

Taken at face value, this might seem to contradict Psalm 15:5. However, when viewed in the broader covenant context, Deuteronomy 23:20 is aimed at preserving mutual support among God’s people. Foreigners or non-covenant outsiders were not members of the Israelite community functioning under the same national and religious directives. Therefore, the prohibition differs between an Israelite “brother” (who should be protected against usury) and a foreigner who was not part of Israel’s covenant structure and land inheritance system.

Old Testament Principles on Lending and Interest

1. Mercy to Fellow Israelites: Exodus 22:25 commands, “If you lend money to one of My people among you who is poor, you must not be like a moneylender to him; you must not charge him interest.” Here, the aim is safeguarding poor Israelites from descending into unpayable debt. These regulations fostered national cohesion and protected the vulnerable.

2. Recognition of Needs: Leviticus 25:35–37 adds further clarity: “If one of your countrymen becomes poor…help him as you would a foreigner or stranger, so he can continue to live among you. Do not take any interest or profit from him…You must not lend him your money at interest or sell him your food at a profit.” The emphasis is on meeting legitimate needs without exploiting those hardships.

3. Distinction in Covenant Membership: While Israelites were commanded to care for foreigners within their gates (e.g., Leviticus 19:33–34), the permission in Deuteronomy 23:20 to charge interest to foreigners recognizes varying economic and societal factors. Foreigners, being outside the covenant, might still enter business arrangements or partake in broader trade practices with Israelites. In such cases, the covenant restrictions on interest did not apply.

Historical and Cultural Background

In many ancient Near Eastern cultures, loan practices often led to severe exploitation of debtors. Entire families could end up in bondage if they failed to repay. Israel’s laws stood out because they promoted compassion and minimized abusive lending.

Archaeological texts, including transaction tablets from the ancient Mesopotamian regions, show interest rates were sometimes exorbitant. By contrast, ancient Israel’s system—rooted in the Torah—sought to prevent a permanent underclass among the covenant community. While charging interest to foreigners was permissible as a standard business transaction, the family-like solidarity among Israelites forbade predatory or any interest-based lending that might further impoverish fellow covenant members.

Harmonizing Psalm 15:5 and Deuteronomy 23:20

1. Different Audiences: Psalm 15 addresses moral integrity within the covenant community. It highlights that a true worshiper of the LORD will exhibit honesty, avoid unfair lending, and refrain from profiting off the misfortunes of close neighbors. Deuteronomy 23:20, on the other hand, sets boundaries for external transactions.

2. Redemption vs. Business Dealings: Within Israel, loans were principally a form of charitable help to keep people from lifelong poverty, rather than profit-driven business. Among outsiders, certain commercial and trade relationships allowed interest-bearing transactions without violating God’s principles of mercy toward fellow Israelites.

3. Consistency of Scripture: Israel is frequently called to show mercy (Micah 6:8). Such mercy within the family of Israel did not eliminate all commercial practices with non-Israelites. These passages do not contradict each other but rather uphold a consistent ethic: preserve the welfare of those within the community and treat outsiders according to the fair norms of broader international commerce.

Practical and Theological Implications

1. Ethical Fairness: For believers, the undergirding principle is loving one’s neighbor and prioritizing relationships over profit. This principle finds a New Testament echo in passages like James 2:15–17, calling believers to compassion without exploitation.

2. Charity Within Community: Psalm 15:5’s admonition reminds believers to be generous, especially to those closest in faith and fellowship. In modern contexts, while standard business practices may involve interest, personal loans within a church or close-knit Christian community often lean toward mercy and benevolence rather than profit.

3. Wise Stewardship: Though interest may have a rightful place in global finance, Scripture underscores wisdom and care. Exploitative lending (usury) that targets the needy remains contrary to biblical ethics.

Conclusion

Psalm 15:5 and Deuteronomy 23:20 appear in different but complementary contexts. The prohibition in Psalm 15:5 guards the covenant community from exploitative lending and upholds the moral virtue of generosity. Deuteronomy 23:20 permits interest in transactions with foreigners, recognizing a different relational framework where commerce follows typical economic conventions, rather than the family-like covenant protection within Israel.

Together, these passages affirm the unity and coherence of Scripture. They reflect an overarching value system in which God desires sincere worship, just treatment of others, and a community distinguished by care for the vulnerable. The apparent difference is resolved by grasping the dual settings—internal covenant care vs. external commerce—and by recognizing the unchanging biblical ethic of protecting the needy and preserving covenant fellowship.