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14493Re: [Covenanted Reformation] Usury or the Charging of Interest on Money Lent

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  • forisraelssake
    Apr 12, 2006
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      Dear Julian

      I am in the RPNA, and while I don't think more than a few of the
      aspects related to interest-bearing loans are even covered in the
      faithful judicial rulings of the Church of Scotland (so leaving this
      in effect an open question/adiaphora among members), it has always
      been my conviction that charging a fair interest rate that is not
      excessive/usurious is biblically justified, since it is just
      compensation for the high time preference of the borrower and the low
      time preference of the lender.

      Interest is the price that borrowers put on having money now rather
      than having money later. This is based on the fact that there is
      always a difference in value between present goods and future goods of
      equal quality, quantity, and form. All other things being equal
      (ceteris paribus), we want to have something now rather than have it
      later. That being the case, the only way to compensate someone for our
      having the thing now rather than later is to promise repayment with
      interest. Interest is not, I repeat, is not by its nature
      exploitative. While it is possible to criminally exact exploitative
      conditions/requirements from the desperately needy in return for a
      loan, that represents the abuse of the institution of lending and not
      what is intrinsic to it.

      Gary North, who is a sound writer in matters economic, has a lot of
      things written about interest being justified but here is a link to an
      important article on usury/interest in his biblical commentaries
      (although I am sure there are many other places where he discusses it
      in his books):


      Chris Tylor
      Edmonton, AB
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