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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Oct 28, 2013

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Religion and money rarely mix well.

When financial controversy arises in organized religion, it usually deals with corruption, greed or ill-informed spending. In recent years, the controversy has centered around several major denomination’s decisions to fight financial organizations and even compete with them.

One recent battle dealt with the Church of England and their decision to drive payday lender Wonga out of business not through legislative means but through competition. Statewide, many churches host financial classes and support anti-consumer loan campaigns.

Although there are current programs to enlighten and protect consumers, the religious linking of finances and faith dates back further than most know.

Many religions have sacred texts lamenting usurious charges and long-term debts, according to Lauren Bloom, an ordained minister and attorney. She said that at a base level, people are supposed to be kind to one another and for those who are lenders — usually the wealthy population — they should not financially deceive the poor.

Bloom said that the current economic practices act “dead contrary” to biblical teachings.

“It comes down to not taking advantage of ignorant people and not gouging the pockets of people that don’t have enough money as it is,” she said. “We have gone too far in this country.”

But there is a large religious power that could be harnessed for this cause. The top five religions have nearly five billion followers. The top three religions carry the large majority of these members, with Christianity ranking in at 2.1 billion followers, Islam at 1.5 billion and Hinduism at 900 million.

Varying Religions, Varying Rules

In a similar fashion to the varying beliefs of alcohol use, abortion or tithing, the main organized religions vary in their rules governing consumer credit. Islam is different than Christianity, which is different when compared to Hinduism.

Yet their varying beliefs seem to have a common thread that vilifies usury.

Dr. Jay Richards, a distinguished fellow at the Institute for Faith, Work and Economics and author of “Infiltrated” said that a historical hatred of usury is not unique to Christianity.

“Buddha denounced it and Islam still follows Muhammad in condemning it,” he wrote in his book.

Both the Qur’an and the Bible state explicitly that usury is a sin.

As the main text in Islam, the Qur’an labels usury as the ninth greater sin. In the Surah Āli- ‘Imran 3:130-131, it states the following:

“Do not devour usury, making it double and redouble and be careful of (your duty to) Allah, that you may be successful. And guard yourself against the fire that has been prepared for the unbelievers.”

Christianity alone has 26 separate Bible verses that deal with usury. They span from a request to lend without expecting repayment as seen in Luke 6:35, to an exact mention in Deuteronomy 23:19, which states the following:

“You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest.”

Richards said that our modern condemnation of usury is actually a mix of religious text and ancient philosophical ideas. One of the largest influencers and critic of usury throughout history was Aristotle. He believed that money was sterile and functioned only as a means of exchange, without any actual value.

The text is absent from the Bible, but the idea that money is sterile has interwoven itself into the fabric of several major religions, Richards said.

Expanding Business and a Hard Focus on Payday Loans

The world is faced with vast issues such as poverty, war and corruption, so it might seem inconsequential to focus on a small type of consumer loans, but some say the cause is just as important.

Bloom believes there is now a large divide between business and faith that should not exist.

Loans are an integral part of modern society. Although some consumers function properly without one, the majority of consumers will need some type of loan, whether for a house, a car or an education, during their lifetime.

The ability to borrow money and the desire to follow one’s religion has not been overlooked.  A new crop of businesses have emerged to blend both the ancient religious rules with modern needs. For instance, niche markets have risen to supplement business requests from devout Muslims, such as lenders offering Islamic mortgages.

In addition, educational groups which foster inter-religious business growth are also growing, such as Kevin Newton’s business, Habbibi Consulting.

Newton said that these new businesses “help financial institutions set up these arrangements that are mutually beneficial for both the bank and the believer.”

Churches have also been forced to remain relevant and address issues that 21st century citizens face. One of them is financial education, Bloom said.

“We are all ministers, priests … but we are also citizens of the United States,” she said. “Our passion for religion doesn’t mean we check our brains at the door.”

She continued stating that there is nothing more important that speaking out against poor lending practices and extending financial literacy.

Educational groups do focus on these items, but when the conversation leads to short-term consumers loans, like personal loans, auto title loans and payday loans, the topic gets heavy.

Bloom said it’s partly because payday loans violate the standard Golden Rule, which is present in most major religions, in one form or another. It states that one should treat another person as they would want to be treated themselves. She said that lenders and legislators that allow payday loans and other high interest consumer loans should ask themselves a question: “Would you do this to your brother, your sister, your mother? And if not, why would you do it to someone else?”

Dr. Don Nations agrees. As an ordained Elder for the United Methodist Church and founder of DNA Coaching, Nations said that Christianity does not prohibit borrowing a mortgage loan or an auto loan, but the religion does find fault with loans which exploit the poor.

“There have been a lot of things which unfairly targeted lower income people and the church has typically spoken out against them,” he said.

The Bible tells a story of Jesus overturning tables in a religious temple when he heard that unfair businesses practices were being conducted.

Nations said the “hot button” issues change over time. But positive and negative financial practices are one of the topics that needs coverage today, if only to explain to consumers that they have a choice.

“People who need a lender of last resort rarely have many choices or options,” he said.

It is this choice that is fundamentally important to Richards. As a supporter of consumer loans when used properly, Richards said that religions demonize small consumer loans because they don’t understand the nature of money.

“A misunderstanding of the nature of credit and money could lead people to be hostile when they don’t need to be,” he said.

Payday loans have to cost more due to the added risk for the lender. And taking away these options will not solve the problem either. Richards said that reducing the financial options of the poor does not help, and comparing APR rates of a short-term loan to the rates of a long-term loan is “comparing the rates as apples and oranges.”

Richards said that eliminating these options, which can be used for good if properly applied, does not make any moral sense.

“If you want to think critically as a Christian, you have to understand Christian theology but you also have to understand economics,” he said.