“If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.” Exodus 22.26, 27

This practice of taking an item in pledge discouraged the idea of “unsecured” loans – such as credit cards, student loans, and the like. (“Unsecured debt” in ancient Israel was called “charity.”) The possibility of having to put up a pledge would have meant that debtors would have limits imposed on them concerning how much  they could borrow. The notion that one could accumulate debt far in excess of the combined value of all his personal property is an invitation to injustice and, thus, foreign to the economy set forth in the Law of God. The fact that one might lose all his property should he default on his loan would certainly have discouraged more borrowing than was absolutely necessary.

Public policy that encourages or enables incurring debt beyond one’s net worth, or that jeopardizes one’s ability to provide for his wellbeing, should not be supported. Nor should it be practiced by government at any level. All borrowing and lending should be secured in real property and engaged case by case between individuals – or institutions such as banks – who know, trust, and love one another before the Lord.

This is not likely to be the case in a secular society and a materialist economy such as our own. However, the teaching of God’s Lawprovides guidelines for Christians in thinking about their own practices of borrowing and lending, and it can serve as a standard for us to focus on as we engage in economic activity and discussions of public policy with respect to this particular aspect of economic practice.

T. M. Moore
 

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