Neither a Borrower Nor Lender Be

First published in The Daily Sentinel, Friday, October 10, 2008.

With the elections happening next week, this post is still timely...

The Bible talks a LOT about money. Most people know that – but they are less sure of what the Bible says specifically about money. In one of my Sunday school classes recently, I handed out a sheet that contained many different sayings. The class was asked to identify which of them are biblical, and which come from somewhere else. Here are some of them:

• God helps those who help themselves.
• Do to others what you would have them do to you.
• Neither a borrower nor a lender be.

So do you know which is biblical and which is not? Only the saying in the middle come from Scripture. Both the top and bottom are extra-biblical. So while they may express an IDEA that could be biblical, the sayings themselves are not.

The economic turmoil of the last several weeks, experts tell us, is because we have a broken credit system. Banks are hoarding cash and refusing to lend to one another. Millions of mortgages are in default. Millions more are unsustainable because the loans are substantially greater than the actual values of the houses themselves.

And now the credit collapse is affecting more than just mortgages. Car loans are harder to get approved – and when approved are for substantially higher interest rates. Even credit cards – the most proliferate form of credit – are not as easy to come by. Jobs are endangered by the lack of business credit. Companies with uneven cash flows can no longer get short-term loans to make payrolls, so people may start losing their jobs because the cash isn’t there to pay them. Guess what that does to the mortgage default rate and bankruptcy courts?

This could be a vicious cycle. New York Times columnist Thomas Friedman called it an “economic perfect storm” and he doesn’t know how much worse things could get. Neither do I, but William Shakespeare’s advice in “Hamlet” seems apt today. In Act I, Scene 3, Polonius gives his son Laertes words of wisdom before the son departs on a journey:

“Neither a borrower nor a lender be; For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry. This above all: to thine ownself be true,
And it must follow, as the night the day, Thou canst not then be false to any man.

Those words are not biblical, but they are wise. Credit – lending and borrowing – is much like oxygen. We need oxygen to breath, yet it is also one of the most dangerous and unstable substances found in nature. Mix oxygen and flame, and trouble can erupt. Mix credit and greed, and the same thing happens.

Ezekiel 18:7-8 offers a word picture of what righteousness looks like, and it has this to say about borrowing and lending: A righteous person “does not oppress anyone, but returns what he took in pledge for a loan. He does not commit robbery but gives his food to the hungry and provides clothing for the naked. He does not lend at usury or take excessive interest.”

Ezekiel sounds similar to Shakespeare. Lending and borrowing are acknowledged, but not encouraged – and especially separated from greed. We may not be able to affect what goes on between the big banks, or between the federal government and Wall Street, but we can affect what happens on Main Street. We can limit the ability of a certain group of people from taking advantage of those most vulnerable to the credit trap.

On November 4th, Ohioans will vote on Issue 5. It’s a confusing item on the ballot because a “yes” vote equals saying “no” to predatory lending. Payday lenders want Ohioans to vote “no” on the issue so that they can continue their business practices without the restrictions placed upon them by the Ohio legislature earlier this year. They want to charge the equivalent of a 391-percent annual interest rate for two-week loans ($15 per $100 every two weeks). If Ohioans vote “yes” to Issue 5, then the interest rate will be capped at 28 percent.

Twenty-eight percent compared to 391 percent? The latter sure seems like usery to me! Payday lenders have spent a lot of money confuse this issue and make it about jobs and a “scary” government database. A spokesperson for the payday lenders’ coalition Ohioans for Financial Freedom asks, “We’re taking away one of the few lending options Ohioans have left? That’s ridiculous.”

What’s ridiculous is targeting people who struggle to make $300 a week with loans that they will pay back only by taking out new loans – and forking over another $15-30 every time. I don’t consider that to be a lending option, I consider that to be oppression and usery. As a Christian, the only way I can be true to myself is to vote “yes” on Issue 5 and do all I can to do unto others as I would have them do unto me.