By Rabbi Leonard Rosenthal
SAN DIEGO–This semester I am teaching the senior class at our new Community Jewish High School. There are only five students in the class but they are all exceptionally bright and Jewishly committed.
We have been using a new book from a new series entitled, Jewish Choices, Jewish Voices, edited by Rabbi Elliot N. Dorff and Dr. Louis Newman. The textbook we are using from the series is about “Money.”
The book includes several contemporary moral dilemmas about public and private finance. These case studies are followed by several questions to consider, and a number of traditional and contemporary sources which shed light on the proposed dilemmas.
Last week’s scenario was about a young woman who had accumulated an unwieldy amount of credit card debt while she was a student. Now that she is working, but at a low paying job, she does not want to repay the debt. She argues that credit card companies are immoral, deceptive, and use predatory tactics to lure young and naive individuals into borrowing and buying more than they can afford. Although she is worried that defaulting on her debts will ruin her credit record, she believes that she is justified in walking away because the credit card companies were immoral and unethical in extending her more credit than she can afford to pay.
The classroom discussion was quite interesting. Most of the students had very harsh opinions about credit card companies. While they agreed that the woman in the case study had knowingly and voluntarily incurred the debt, they also believed that the credit card companies prey on young people who do not have sufficient skill or maturity to resist the temptation to purchase goods and services they cannot afford.
Many Jewish sources support my student’s views. One of the sources we studied is from the Babylonian Talmud: “Whence do we learn that one does not hand a cup of wine to a Nazarite [who has taken a vow to abstain from alcohol] and the limb from a live animal to a gentile [who is bound by the Noachide Law, which forbids eating such meat]? Scripture teaches, “You shall not place a stumbling block before the blind.” (Lev. 19:14) (Babylonian Talmud, Pesachim 22b)
That is, one is forbidden to tempt another human being with something that might lead them to sin. One cannot give wine to a Nazarite knowing that he may be tempted to break his vow. So, too, should credit card companies not tempt young people with easy access to cash that they may find hard to resist.
I, on the other hand, felt more strongly that the responsibility for accumulating excess debt lies with the borrower. The person who uses credit cards agrees to repay the borrowed money at a certain interest rate and with certain penalties and charges for late payments. Assuming we are not speaking about overt deception, not taking time to read a contract that one signs is not an excuse for not fulfilling one’s promise and obligation.
This same argument has been raised against those who purchased homes they could not afford. It was their responsibility to buy a house they could afford using a mortgage with terms they could fulfill, instead of using questionable loans to buy homes that were out of their financial reach.
The Torah, while suggesting one must be compassionate in dealing with the needy, does not take sides when it comes to the responsibility of those extending and accumulating debt.
Responsibility to do the right thing lies both with the borrower and the lender: “You shall neither side with the mighty to do wrong-you shall not give perverse testimony in a dispute so as to pervert it in favor of the mighty-nor shall you show deference to a poor man in his dispute.” (Ex. 23:2-3) That is, when judging a case in which the powerful (financial institutions) is in dispute with the weak (the borrower), one must not favor one side over the other. One must judge the case and evidence without regard to the plaintiff and the defendant. One must judge the case on the facts.
On one hand, there is much credit card companies and financial institutions could do to be become more restrained and transparent when they offer credit, especially to those who may have trouble repaying it. However, borrowers also have to act in good faith and control their impulses so they do not borrow and buy more than they can afford.
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Rabbi Rosenthal is spiritual leader of Tifereth Israel Synagogue in San Diego