In Parshat Mishpatim, meaning “Laws,” we see an explosion of moral revelation. We received the Ten Commandments in our previous parshah, and now the Jews have entered into a new era and into a revelatory relationship with God. So in this parshah, which consists almost entirely of laws, an immense amount of moral and justice-oriented teaching emerges.  

These laws—“mishpatim”—deal with everything from the treatment and release of slaves; to the punishments for murder, theft, and kidnapping; to the prohibition of the oppression of strangers (this is so important that it occurs twice in this Torah portion); to the care of widows and orphans; and even laws about lending. Our parshah also includes the mitzvah of observing the shalosh regalim, the three pilgrimage festivals. (The mitzvot of the Torah can generally be divided into two categories: chukim, laws which are beyond, or seemingly beyond, our comprehension; and mishpatim, laws which we can comprehend with relative ease. Parshat Mishpatim, as its name indicates, deals almost exclusively with this second category)

The Torah reads: 

If you lend money to My people, to the poor among you, do not act toward them as a creditor; exact no interest from them. (Exodus 22:24)

This commandment prohibits charging ribbit, or interest, to fellow Jews. (In English this is known as “usury.”) Or, the affirmative formulation of this mitzvah is that we have an obligation to make free loans.  

Rashi comments that the meaning here isn’t really “If you lend money,” but “When you lend money.” He writes: 

R. Yishmael said: wherever [the term] “im” (“if”) occurs in the Torah, it is used to describe an act the performance of which is optional, except in three instances, of which this is one. ( Mekhilta deRabbi Yishmael 22:24:)  (Rashi on Exodus 22:24:1)

The Torah teaches us that we need to be compassionate in the process of lending so that the dignity of the debtor remains intact. Our original Exodus passage on lending goes on:  As an aside, I don’t believe that it is unjust that gentiles do not have to be offered free loans, as receiving interest is not inherently immoral. Rather, not charging interest is an “exceptional” moral act reserved for family and community.

If you take your neighbor’s garment in pledge, you must return it to him before the sun sets; for it is his only clothing, the sole covering for his skin. In what else shall he sleep? Therefore, if he cries out to Me, I will pay heed, for I am compassionate. (While the lender cannot be certain that this is the individual’s only garment, one must act as if it is. Additionally, even if the debtor in question has more than one garment, they are to be treated in accordance with this verse in order to preserve their dignity) (Exodus 22:25-26)

Here we learn explicitly that we must act compassionately with a debtor because God Godself is compassionate. In doing so, we are acting God-like.

In the Jewish tradition, an interest-free loan is one of the highest forms of monetary justice. Rambam (Moses Maimonides) writes in his Mishneh Torah: 

There are eight levels of tzedakah, each one greater than the other. The greatest level, higher than all the rest, is to fortify a fellow Jew and give them a gift, a loan, form with them a partnership, or find work for them, until they are strong enough so that they do not need to ask others. (Mishneh Torah: Gifts to the Poor 10:7)

He reaches this conclusion by interpreting a related pasuk (verse) in Leviticus as saying, “Hold [your kinsman] up, so that they will not fall and be in need.” (Leviticus 25:35) ( The pasuk itself reads: “If your kinsman is poor and his hand reaches out to you, hold him up… and he shall live with you.” Rambam, as explained above, is using the technique of reversing the order of the two halves of the verse, thereby interpreting it to be referring to the need to take preemptive action.)

As with countless issues in the Torah, the application and implications of the anti-interest law becomes complicated in the practical world. The dignity of the poor, of course, must be given the utmost respect. At the same time, there needs to be an incentive for a lender to make loans. 

In a more advanced economy, people have their whole livelihood through lending money, and people need loans to live self-sufficient lives. As a result, the rabbis created a “workaround” to the problem via the concept of a heter iska, or exemption contract. (The early roots of this idea can be found in Bava Metzia 68. The earliest source for the heter iska can be found in the work of Rabbi Israel ben Petachyah Isserlein (b. 1390) in Terumat HaDeshen 302. Rabbi J. David Bleich reports that the first actual heter iska contract was issued by Rabbi Mendel Avigdors of Cracow (a 16th century Polish scholar) as referenced in J. David Bleich, Contemporary Halakhic Problems, (New Jersey: Ktav Publishing House, 2012), 85; J. David Bleich, “Survey of Recent Halakhic Periodical Literature: The Hetter Iska and American Courts,” Tradition: A Journal of Orthodox Jewish Thought 42, no. 3 (Fall 2009), 50.)

A similar difficulty used to occur during shemitah, the sabbatical year. At the end of the shemitah year, all debts between Jews are supposed to be forgiven according to Torah law. However, this caused problems in the time leading up to the scheduled debt cancelation, as it would be unattractive for someone to give a loan that would be forgiven almost immediately. 

As a result, Rabbi Hillel, over 2,000 years ago, created the prozbul, a “loophole” document that allowed the lender to technically transfer the loan to a rabbinic court, enabling the poor to access the money needed and the lender to collect the loan even after the shemitah year.   

The Mishnah relates in Tractate Gittin: 

And Hillel instituted a document that prevents the shemitah year from abrogating an outstanding debt for tikkun ha’olam, the betterment of the world. (Mishnah Gittin: 4:3)

From the moral principles laid out in our parshah, we can find several lessons about how we should be treating debtors in general. 

For one: Obviously, the predatory lending and excessive interest rates that are all too common today cannot be reconciled with our Torah values. The Rambam sees Exodus’s anti-interest law as a direct repudiation of predatory lending. He teaches: 

Anyone who acts as a creditor toward the poor, when he knows that the debtor has nothing to repay, breaks a prohibitive command, as it is written: “You shall not act like an extortioner toward him.” (Exodus 22:24) ( Mishneh Torah: Creditor and Debtor 1:2)

And the God who sought to protect people from unnecessary debt clearly would not approve of the crippling medical debt and student debt that currently plagues the United States. Americans currently owe $1.75 trillion in student loans and, according to a recent Stanford University study, about $140 billion in medical debt. (Board of Governors of the Federal Reserve System (US), Student Loans Owned and Securitized (SLOAS), retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SLOAS, December 1, 2021.) (Standford Institute for Economic Policy Research: “America’s medical debt is much worse than we think” (2021).

Such financial burden is not just incredibly stressful and emotionally overbearing, it also can be debilitating to one’s mobility in life. 

To be sure, creditors clearly have the right to the debts owed to them. A number of loans default, so there’s risk to the creditor. And as the Jewish tradition has shown us, there needs to be some incentive for lenders to lend. At the same time, the dignity of all people, especially those most in need, must take priority. 

The Talmud lays out a basic system of priorities in lending: 

Yosef learned: “When you lend money to my people” [if the choices before you are] a Jew and a non-Jew, a Jew has preference; the poor or the rich, the poor takes precedence; your poor (your relatives) and the [general] poor of your town, your poor come first; the poor of your city and the poor of another town, the poor of you own town have priority. (Exodus 22:24) (Babylonian Talmud, Bava Metzia 71a)

But this is a difficult paradigm to apply across the board, since it implies all factors are otherwise equal. But all factors are rarely equal. What if one’s parent has merely a cold but a stranger is in dire straits? What if one’s neighbor has minor financial hardship but someone on the other side of the world has a life-or-death need? We will need more tools to decide where to make our loans. 

All of this, as in the days before Hillel created the prozbul, demands a solution. The conversations around medical- and student- debt cancelation are a good starting place, even if we have not yet found a policy that is both practical and just. Additionally, the government can provide access to more low-interest loans, helping citizens avoid getting into insurmountable debt in the first place. In the Jewish world, Jewish Free Loan is an organization that, as outlined in our parshah, provides interest-free loans.  

From the debt-related mitzvot and their interpretation throughout the generations, we learn that there needs to be a middle ground beyond the overly demanding standard of no charging of interest and a system that makes lenders unjustly wealthy at the expense of the most vulnerable.