May A Church Draw Interest On Its Money?

By Daniel L. Holloway

In the January 29, 1981 issue of Guardian of Truth, brother Hoyt Houchen dealt with the following question: “Is it right for a church to loan a bank money and draw interest on it?” Generally, I consider his answers to be quite sound from a scriptural standpoint. Also, I have been impressed with the clarity and wisdom with which he writes. However, I do not believe that he answered correctly when he said that “it is right to receive a small payment of interest.” I am writing in response to his answer inasmuch as I am concerned about the influence it may have on congregations. While I am limited in understanding matters of economics and banking, I do trust that my reasoning will be sound and in accord with God’s word. Should anyone show me wherein I have misinterpreted the scriptures on this matter, I will be glad to endorse brother Houchen’s answer.

In his first paragraph, brother Houchen says that the church is not to “seek out business enterprises for the purpose of investing and realizing a financial profit.” He continues, “On the other hand, a church may sell its own property and receive a price that is commensurate with the market price of that property . . . .” He concludes, “There is a difference in such transactions and the church planning and devising schemes whereby it can make money.” With this, I am in complete agreement. However, he then says that interest does not seem to be in the latter category. The only difference which I can see is one of extent or rate of return – normally, a business enterprise would mean more money than would interest. After all, what is the reason for loaning money to a bank if not to make money?

The first argument which brother Houchen sets forth to support his conclusion is that interest rates do not begin to equal the rate of inflation and that, as faithful stewards, we cannot sit by and allow the Lord’s money to lose in value. This implies only that churches may draw interest to maintain the value of the Lord’s money. It appears to me that economic conditions have nothing to do actually with whether or not a church may draw interest on its money. Let us keep in mind that the Lord’s American money continues to be worth just as much as anyone else’s American money. And what if the economy was to deflate? Then the Lord’s money would be worth more. Surely, no one believes that we should dispose of some of it to keep its value from changing. We have already noted that it is permissible to sell church property at market price and receive a profit. Are we to say that it is all right for the value of the Lord’s money to increase but wrong for it to decrease?

Brother Houchen refers to the slothful servant in Matthew 25 who was told by his lord that he could have put his money to the bankers that it might have drawn interest. Several points can be made here. First, the text does not say that the lord’s money had decreased in value due to inflation. As far as we can tell, its value had remained the same. Actually, the lord was concerned with making money. Furthermore, if the parable authorizes churches receiving interest on their money, it also authorizes their involvement in business enterprises. Notice, the lord was pleased with the two who doubled his money by investing it in trade (Matt. 25:16-23). The lesson of the parable is that we should faithfully serve God according to our ability. Certainly, this includes using the Lord’s money wisely in His work, but it says nothing about the way in which the Lord’s money is to be accumulated. Again I say, economic conditions have nothing to do with whether or not a church may draw interest on its money.

Brother Houchen then reminds us that banks make use of money deposited in them by loaning it out. Thus, interest amounts to a “small payment” for the use of one’s money. His conclusion is that if churches may deposit money in a bank, they are likewise authorized to receive interest. As we consider this, let us look to the scriptures to see what they do authorize. We recognize that God has given us a means for acquiring money for carrying out the Lords’ work. That means is the free-will offering of the saints (1 Cor. 16:1, 2; 2 Cor. 9:7; Acts 4:34-37). Inasmuch as the collection is authorized, it necessarily follows that there is authority for keeping it somewhere. When a church deposits money in a bank merely to have it in a safe place, its actions are authorized. So long as the bank is conducting legitimate business, it seems that the use which they make of the church’s money is of no consequence to the church. However, if a church loans its money so as to receive interest, it is doing more than putting its money in a safe place. Though operating on a smaller scale, it is seeking to make money as are churches which invest in business enterprises.

I ask of brethren that they carefully consider this question in light of God’s word that they might follow the right course.

Guardian of Truth XXV: 18, p. 281
April 30, 1981