Interest with Non-Jews: Difference between revisions

#A non-Jew who borrowed from a Jew and is ready to return the money, if he finds another Jew to borrow that money with interest can give it to him with interest. However, if the non-Jew brought the money to the lender Jew he can't lend it to another Jew since that considered a loan between the lender and the other Jew with interest. Obviously this is forbidden if the non-Jew actually gave the money back to the lender that the lender may not lend that money to a Jew with interest. Additionally it is forbidden if the non-Jew put the money on the ground for the other Jew to pick up and the lender stated that the non-Jew would be exempt once he placed the money on the ground. These are all considered biblical interest.<ref>Gemara Bava Metsia 71b, Shulchan Aruch Y.D. 168:6</ref> However, if the non-Jew simply hands the money to the borrower Jew in the presence of the lender Jew, most rishonim hold that this is rabbinically forbidden since the non-Jew is an agent of the borrower. However, there is a minority opinion in the rishonim who allows this.<ref>Rashi Bava Metsia 71b s.v. v'im explains that the conclusion of the Gemara was that there is a concept of agency for two Jews to create a loan between them with interest. This is rabbinically forbidden. This is the opinion of the Rif, Ramban, Rashba, Ran, and Nemukei Yosef all cited by the Bet Yosef 168:6. The Rambam Malveh Vloveh 5:4 however holds it is biblically forbidden. On the other hand, Rabbenu Tam held that the gemara backed out of that stringency and so it is permitted. Rosh responsa 108:11 ponders how someone could possibly rule like Rabbenu Tam when it seems that it is forbidden and Rabbenu Tam brought no proofs. Either way, there the Rosh rejects following Rabbenu Tam initially. He is aware of the practice of some people to follow Rabbenu Tam but he argues that it is incorrect and the lender could only accept the interest if he is unaware that the non-Jew is borrowing the money for the other Jew.</ref> The halacha is not to accept this minority opinion.<ref>Shulchan Aruch Y.D. 168:6 completely rejects Rabbenu Tam's opinion. Rama 168:5 and 7 cites Rabbenu Tam however he says that one should only follow that opinion where there is a minhag. Chelkat Binyamin 168:51 writes that we don't follow the Rabbenu Tam since it is a question of biblical interest.</ref>

#The agent can't take upon himself responsibility for the capital or the interest. If he takes upon himself responsibility for either one that is considered as though the agent is a borrower and there is interest when the lender takes interest from the borrower.<ref>Shulchan Aruch 168:13. Bet Yosef 168:13 s.v. vda deliberates whether it is problematic to accept responsibility for the capital and not the interest or the interest and not the capital. Ultimately he says that the Tur clearly understood that the Jewish agent may not accept responsibility for either. </ref> According to Ashkenazim it is only necessary for the Jewish lender to accept responsibility for the loan and collateral after the transaction began, which is the time when the money for the loan was transferred to the agent but not from the time that the collateral was picked up to be delivered to the lender.<ref>Darkei Moshe 168:12 clearly thinks that it is unnecessary for the lender to accept responsibility from the time of the collection of the collateral in order to be delivered since the loan didn't begin. Though he agrees that he should accept responsibility from the time that the agent accepted the money in order to return it to the non-Jewish borrower. Shach 168:37 and Taz 168:18 agree with the Darkei Moshe against the Bet Yosef.</ref>

#Some permit borrowing from a non-Jew with a security deposit so that they can in turn borrow with interest from another Jew with that security deposit. This is permitted since the non-Jew takes responsibility for the original loan and it is treated as two loans and not one. Ashkenazim can rely on this opinion.<ref>Ri cited by Rosh b"m 5:55, Rosh responsa 108:11, Rama 168:8 seems to support this approach. Darkei Moshe 168:4 quotes the Mordechai and Hagahot Ashri who held that it is permitted even initially. Darkei Moshe 168:9 cites the Kol Bo 84 and Hagahot Maimoniyot Malveh 5:3 who says that the minhag was like the Ri</ref> Others hold that generally this is forbidden to arrange but if one explicitly tells the non-Jew that he has responsibility for the loan then it is permitted.<ref>Ramban b"m 71b s.v. vbar cited by Tur 168:9, Rashba 7:321, Nemukei Yosef 42a, Talmidei Harashba, and Baal Hatrumot 46:4:10 s.v. vkatav alav haramban cited by Bet Yosef 168:9</ref> The Jewish borrower must make sure that the security deposit that he gave to the non-Jew was given completely such that the non-Jew could acquire it with a proper [[kinyan]].<ref>Shach 168:20 writes that one needs to make sure that the non-Jew acquired the collateral with a kinyan such as meshicha, pulling it. Chelkat Binyamin 168:63 and 65 explains that there's two approaches for the case of a Jew who borrowed from a non-Jew who in turn borrows from a Jew when there's a collateral. The Gra and Levush say that the collateral doesn't add or detract anything, it all depends on whether the non-Jew was an agent of the original Jew in which case it is forbidden and if not it is permitted. The Shach, Taz, and Chavot Daat 168:12 however, hold that the collateral of the Jew can serve as a Arev Kablan, guarantor for the non-Jew from the original Jew and that is a problem. Another words, since the original Jew's property is held responsible for the interest loan of a non-Jew to the second Jew, it is as though the original Jew is the guarantor of that interest loan. In Shulchan Aruch Y.D. 170:2 it is codified that a Jew may not be a guarantor of a non-Jew's interest loan from a Jew. Therefore, the way to solve that issue is by having the original Jew completely allow the non-Jew to acquire the collateral and his transactions with it afterwards are separate from him. (See Talmidei Harashba cited by Bet Yosef 168:9 who is unconcerned for the collateral being a guarantor since it is considered a Arev Stam.)</ref>

===Non-Jew Selling Jew's Debt===

#A Jew lent a non-Jew with interest upon a security deposit of the non-Jew. Then the non-Jew sold the security deposit to another Jew and he was told to pay the debt to the first Jew and collect the security deposit. This transaction is totally permitted since the loan was made between the Jew and non-Jew and then there was a sale of the non-Jewish debt to a Jew.<ref>Rosh responsa 108:25, Shulchan Aruch 168:12</ref>

#However, if the Jew who bought the debt, didn't pay off the debt immediately in order to redeem the deposit and only paid it after some time, thereby accruing a further interest charge upon the non-Jewish lender, the Jew lender may force the non-Jew to pay that interest charge even if the non-Jew in turn will force the Jewish buyer to pay him for that interest charge. But the Jewish buyer may not pay the interest to the Jewish lender because that would paying interest.<ref>Rosh responsa 108:25, Shulchan Aruch 168:12</ref>

===Jew Selling Non-Jew's Debt===

#If one Jew lent money to a non-Jew with interest he can then sell that loan to another Jew. He should stipulate that this is a complete sale of the loan and they will no longer have any claims upon each other. Thereby the buyer becomes the new lender to the non-Jew and can collect interest.<ref>Shulchan Aruch 168:18. When there is no security deposit, the Shach 168:62 explains that the mechanism isn't exactly a sale since one can't really sell the debt to another Jew. Rather one is forgiving the non-Jew from paying him back. Then the non-Jew can pay the second Jew as he is "considered" according to their intention to be the new lender. In Shach 168:63 he clarifies that he doesn't need to inform the non-Jew of that which he forgave. Netivot Shalom 168:18:9 explains that even though the non-Jew will be paying the second Jew in error he can collect it. Shach 168:63 is in disagreement with the Bach who thinks that it is necessary to alert the non-Jew. See Chavot Daat 168:41 who endorses another approach; he explains that this transaction is a sale with respect to non-Jews and purely forgiving a loan with respect to Jews. Therefore, he concludes that the first Jew may not go and reacquire the loan from the non-Jew that he forgave. However, it seems Chelkat Binyamin p. 313 would challenge this from C.M. 66:25.</ref> When there is a security deposit from the non-Jew that would have to be transferred to the second Jew with the same stipulation that it is a complete sale and they have no claims upon each other.<ref>Shulchan Aruch Y.D. 168:18</ref> According to Ashkenazim it isn't necessary to make such a clear stipulation since it is assumed that this is the stipulation.<ref>Rama 168:18 following the Mordechai and Rosh teshuva</ref>

#A Jew who lent a non-Jew for a certain percent he can sell that loan at a lower percent. For example, if the first Jew lent a non-Jew $100 for 10% a year and then resold that debt to another Jew for 5% a year.<ref>Rama 168:18, Chelkat Binyamin 168:204</ref>

#A Jew who lent a non-Jew money for interest can then resell it to a Jew but he may not sell a portion of that loan to a Jew.<ref>Shach (Nekudat Hakesef on Taz 168:28) and Derisha 168:16</ref> Others allow even selling a portion of it.<ref>Taz 168:18, Chavot Daat Chidushim 168:53. This is also the implication of the Trumat Hadeshen 303, Bet Yosef 168:18 s.v. vkatuv, and Darkei Moshe 168:16. Chelkat Binyamin 168:204 cites both opinions.</ref>

#It is permitted for the buyer of the debt to leave the non-Jew's security deposit in the hands of the original Jewish lender.<ref>Rama 168:18 clarifies that it is sufficient for the sale of the loan to be effective when the buyer pays for the loan even if he isn't transferred the loan document or the collateral and doesn't do another kinyan. It is evident in the Darkei Moshe 168:17 and Chavot Daat 168:37 that selling a non-Jew's debt is ineffective with merely paying for the debt, the loan document physically needs to be transferred. However, when a collateral is involved it is sufficient to pay for it. Chelkat Binyamin 168:214 clarifies that one should be explicit that one is selling the collateral wherever it is. Ideally, the Rama concludes, one should use a kinyan to sell the collateral and not rely on the payment alone. The Chelkat Binyamin 168:215 explains that meshicha or sudar are good forms of kinyan.</ref> The responsibility of the security deposit is now upon the second Jew but if they stipulated that the first Jew would have responsibility then he does.<ref>Bet Yosef 168:18 s.v. vkatuv, Rama 168:18, Chavot Daat 168:37. Shach 168:58 notes that in such a case it is necessary to do a formal sale of the loan in order for him to leave the security deposit with the first Jew. </ref>

#It is forbidden to say that one wants to borrow from another Jew with interest on or in exchange for a non-Jew’s collateral which was given to the first Jew because of an interest loan,<ref>Rosh responsa 108:28 writes that if a Jew who lent to a non-Jew with interest asks another Jew to lend him money with interest on the collateral he received from the non-Jew that is considered taking interest. Tur and Shulchan Aruch Y.D. 168:19 codify the Rosh. What exactly is the issue with this formulation? The Shach 168:64 contends that as long as one says that one wants to borrow from another Jew with interest on a non-Jewish collateral we can’t reinterepert his words and since he said he wanted to borrow with interest that is how we view his transaction. However, if he wouldn’t explain the transaction at all, we would explain him to mean that he intended to buy it since we’d prefer to say he did something permitted. Chelkat Binyamin 168:236 sides with the Shach. He explains that there’s a fundamental difference between a sale and a loan. A sale is where the first Jew is completely removed from any dealings with the non-Jew and if he collects anything from the non-Jew he must give it to the second Jew. A loan is where the first Jew must pay the second Jew whether or not the non-Jew will pay. The Bach 168:26 disagrees and explains that there is a minhag to be lenient even if one says that one intends to borrow because we reinterpret it to mean to buy. Taz 168:28 seems to agree. The Bet Yosef and Taz imply that the reason for the Rosh isn’t because of his incriminating words but rather because of his motivation. If the Jewish lender would have borrowed on that collateral for the benefit of the non-Jew it wouldn’t be considered a Jewish loan. However, as long as the motivation is for the needs of the Jew we understand that transaction between the two Jews to be a loan and not a sale.</ref> in whatever way the collateral is transferred to the second Jew.<Ref>Shach 168:64 concludes that this issue of stating that one wants to borrow from a Jew with interest on the collateral of a non-Jew is only a problem if the first Jew owes the non-Jew's collateral such as if the non-Jew stated that it was his retroactively from the time of the loan if it goes unpaid, however, if he doesn't have that ownership and he transfers the collateral to the other Jew it is permitted. Chavot Daat 168:41 and Rabbi Akiva Eiger on Shach 168:64 disagree. Chelkat Binyamin Biurim 168:19 s.v. vamar p. 367 answers their question.</ref>

#If the borrower claims that his lender charged him interest and now it should be deducted or should be returned, if the lender responds that it was done in a permissible way he is believed without any oath.<ref>Shulchan Aruch Y.D. 177:9, 177:12, Rama 160:18. The Taz 177:19 and Shach 177:27 explain that the reason for this is that we assume that it was done in a permissible fashion rather than a forbidden one. Although Taz 177:17 is troubled by this halacha of why it is worded regarding orphans, Shach 160:30 explains that there is no difference between whether the lender is an orphan or not; rather the question asked of the Rashba was with respect to orphans. If the lender responds that it was done in a permitted way then he is believed, and if he denies getting interest he is believed with an oath.</ref> Some say that it is necessary to specify how it was done permissibly.<ref>Taz 168:36. See Shaarei Deah 168:11 who differs.</ref>

# If the borrower claims that his lender charged him interest and it should be deducted from the capital according to the interest he paid and the lender responds that he never took interest he is believed only if he takes an oath.<ref>Shulchan Aruch Y.D. 168:25, 177:11. The reason is that since the lender says that he never took the interest we can't assume that it was taken but taken in a permitted way. We have to substantiate the claim that he denies getting the interest. Therefore, he is obligated to take a shevuat hesit which is obligated by anyone who denies money. Although the Rabbenu Yerucham quotes the Ramah who doesn't require a shevuah even in such a case, the Shach 177:26 clarifies that we follow the main opinion in Shulchan Aruch and Rama.</ref>

#After the fact, if a Jew was a guarantor for another Jew for an interest loan from a non-Jew when it was specified that the lender would automatically claim the money from the guarantor first, which is forbidden to arrange, any interest that the guarantor paid needs to be returned. However, if it was set up such that the lender could choose to collect from the borrower or the guarantor first, which is also forbidden to arrange, however, after the fact, the money doesn't need to be returned to the guarantor.<ref>Shulchan Aruch and Rama Y.D. 170:1, Taz 170:1. The Bet Yosef explains that in cases where it is a dispute between Rashi and Rashba after the fact one doesn't have to pay because they can rely upon the Rashba. The Darkei Moshe argues that in all cases one doesn't have to return the interest after the fact since it is only rabbinic interest. Taz 170:1 rejects the opinion of the Darkei Moshe arguing that the Gemara makes it clear that it is a biblical prohibition. Shach 170:2 defends the Rama that it would be rabbinic if the Arev isn't a Arev Shluf Dutz or a guarantor of a non-Jew borrowing from a Jew.</ref>

#It is permitted to pay a guarantor to be a guarantor.<ref>Taz 170:3, Nekudat Hakesef 170:2. The Taz explains that one isn't paying for the fact that the Arev is going to lend one money if he ends up paying on his behalf, rather one is merely paying so that he should ensure my loan.</ref> Some question this if the payment seems to take in account the risk that the guarantor assumed in the case he would actually have to pay and only be repaid by the borrower at a later date.<ref>Chelkat Binyamin Biurim 170:1 p. 388 s.v. hari. Chavot Daat 170:1 does not allow paying the guarantor to be a guarantor.</ref> Certainly one shouldn't pay a guarantor to be a guarantor whom the lender goes to be paid before he goes to the borrower (Arev Shluf Dutz).<ref>Taz 170:3 forbids, while Shach in Nekudat Hakesef 170:2 questions it. Chavot Daat 170:1 is strict. Chelkat Binyamin 170:12 for an Erev Kablan cites the dispute but sounds like many are lenient, while for Arev Shluf Dutz only writes that many forbid it.</ref>

#One may not enter into a guarantor relationship that is forbidden even if doesn't end up paying interest.<ref>Can you arrange to be a guarantor that is forbidden if you don't end up paying interest? Nekudat Hakesef 170:3 implies that there's no prohibition. Taz 170:5 disagrees. Bet Meir 170 questions the Nekudat Hakesef. Most achronim disagree with the Shach, primarily because the Gemara Bava Metsia 75b and 71b strongly imply that there is a biblical prohibition to arrange to be a guarantor that is forbidden. Some answer that the Nekudat Hakesef would limit the gemara to cases where the guarantor is a for a Jew who is borrowing with interest from a Jew and not from a non-Jew (Mishnat Shmuel Arvut Bribit p. 26, Dvar Shalom Ribit Horovitz p. 304). Others answer that the Nekudat Hakesef would be limited to a guarantor that is only rabbinically forbidden such as a Arev Kablan but not an Arev Shluf Dutz (Neitvot Moshe on Taz 170:5 citing Shevilei Dovid and R' Aryeh Leib). Shaar Deah 170:5 disagrees with the Nekudat Hakesef and proves it from the Raavan. Either way, most argue with the Nekudat Hakesef (Brit Yehuda ch. 1 fnt. 33).</ref>

#For a guarantor to be obligated to pay if he accepted being a guarantor at the time of the loan he doesn't need a [[kinyan]] but if he accepted it afterwards he needs a [[kinyan]].<ref>Shulchan Aruch C.M. 129:1-2 Bet Yosef Y.D. 170:2</ref> Becoming a guarantor on ribbit is always considered like not at the time of the loan and requires a kinyan<ref>Raavan teshuva 104, Bet Yosef 170:2, Taz 170:8, Shach 170:5</ref> unless it was combined together with the capital and would have to be paid even if the loan was paid early.<ref>Maharam (Teshuva Prague Edition n. 38) cited by Mordechai Bava Metia n. 333 and Bet Yosef 170:2, Shach 170:5</ref> Becoming a guarantor to exempt another original guarantor it isn't clear if a kinyan is necessary.<ref>Shach 170:9. He explains that this is the safek of the Hagahot Ashri.</ref> If the guarantor is exempting the borrower so that the lender will only collect from the guarantor that is binding without a kinyan.<ref>Rama CM 129:3, Sama 129:9, Shach YD 170:9. Since he is completely exempting the borrowing it is like he is the borrower and a guarantor at the time of the loan which doesn't need a kinyan.</ref>