Jewish tradition has always been aware of the importance of allowing poorer people access to loans. Indeed, in Maimonides' famous description of the eight levels of charity, the highest level is lending money to, or going into partnership with, a poor person so that they can become self-supporting. 

In biblical times, the laws of the sabbatical year and the jubilee were created. In the sabbatical (seventh) year there was to be a remission of debts and in the jubilee (50th) year, land, which had been sold to pay of debts, was to be returned to its original owners, and slaves were to be freed.

There may be academic debate about the degree to which the sabbatical year and jubilee were a regular part of life in ancient times, but there is no doubting the principles that underpin them. That is, people find themselves in debt for various reasons, often no fault of their own, and it is the duty of an ethical society to ensure that these people are not permanent social outcasts.

The sage Hillel maintained a spirit of this tradition in Talmudic times, even as he radically altered the law. He created the law of the prosbul to ensure that commercial credit would still be available even just before a sabbatical year. The great academies of the time accepted that the poor needed to have access to credit, but also that lenders were right to expect it to be paid back. But through all this legislation, biblical and rabbinic, it is clear that one aspect of lending and borrowing money was completely forbidden: the charging of excessive interest.

We must assume that the sages recognized how easy it was for interest to escalate and ruin people. In modern times we know that reasonable rates of interest are essential to enable normal financial life to continue. But punitive rates of interest that ruin families, businesses and countries, are completely unacceptable.

The following texts demonstrate that the forgiveness of debt is not only important in human terms, but a divine duty:

• "The spirit of God is upon me, because God has anointed me; The Eternal One has sent me to bring glad tidings to the lowly, to heal the brokenhearted, To proclaim liberty to the captives and release to prisoners, To announce a year of favor from the Eternal One." (Isaiah 61)
• "At the end of every seven-year period you shall have a relaxation of debts, which shall be observed as follows. Every creditor shall relax his claim on what he has loaned his neighbor; he must not press his neighbor, his kinsman, because a relaxation in honor of the Holy One has been proclaimed." (Deuteronomy 15)  

Religious Action Center of Reform Judaism

Reprinted in full text with permission of the Religious Action Center of Reform Judaism. The RAC pursues social justice and religious liberty by mobilizing the American Jewish Community and serving as its advocate in the nation's capitol.

Hebrew scripture details for us one of the world's earliest social welfare system. We are taught to leave the corners of our fields and the gleanings of our harvest to the poor (based on Leviticus 19:9), and to open our hands and lend to people whatever it is they need (based on Deuteronomy 7-11).

We learn that helping fellow human beings in need, tzedakah, is not simply a matter of charity, but of responsibility, righteousness, and justice. The Bible does not merely tell us to give to the poor, but to advocate on their behalf. We are told in Proverbs 31:9, to "speak up, judge righteously, champion the poor and the needy."

Jewish history also provides us with an example for helping the needy. During Talmudic times, much of tzedakah was done though tax-financed, community-run programs that provided for the poor, the hungry, the ill, and the children, a close parallel to the entitlement security we fought, and continue to fight, to persevere in our society today.