Christian Banking?

Planet Money is an interesting and usually fair-minded (they talk to Keynesians and to free-market capitalists) account of economic theory and the global economy. Their most recent podcast was a story about a Spanish savings bank called cajas de ahorros. It is essentially a savings and loans and, like a great lot of financial institutions it has made too many bad loans and it’s teetering on the brink of collapse. One aspect of this financial institution, however, separates it from others about which you’ve read since 2007 (or since the late 70s if you’re old enough to remember the S&L crisis): It is owned by the Roman Church.

Spain is a largely post-Christian European nation but the Roman church has, of course, an honored place in Spanish history and because of that connection this church-owned S&L was highly trusted by the people. Now, however, the European Union is working on a bailout for this church-owned S&L. This isn’t a brand new venture for the Roman church. CajaSur was founded in 1864. Six Roman priests are among the bank’s board members and refusal by the board to merge with another caja has led to a bailout by the Spanish central bank.

It would be interesting to find out the background behind the move of the Roman church in Spain into banking. Histories of the middle ages usually tell stories about Jewish banking families and strict regulation by the medieval church on usury and regulations forbidding the charging of interest by Christians. In Geneva, in the middle of the 16th century, interest was strictly regulated and limited. There is some history on the Wiki page (as always, remember it’s a Wiki page. Anyone can say anything on a Wiki page).

In principle this enterprise is not much different from a church-operated BBQ joint. One of the reasons I’m concerned to distinguish between common and sacred spheres is precisely to avoid this sort of confusion. Christ instituted his church, the visible, institutional church and ordained it to perform three functions (see Belgic Confession Art 29):

  • Preach the Word (Matt 28)
  • Administer the Sacraments (Matt 28; Luke 22)
  • Administer Church Discipline (Matt 16; Matt 18)

The first point touches what the visible church should be doing. Obtaining a good rate of return is not one of the marks of the true church. Failure to keep its collective eye focused on the Dominical mandates hurts the visible church. The more we try to do what we’re not commanded to do, the less effectively we will be able to do what we are commanded to do. This is about the mission of the church. As we begin a new year, perhaps now is a good time to re-think what our congregations are doing and ask whether the agenda is consonant with the marks of the church or a distraction from them?

The second point is about the failure to distinguish properly between Moses and Christ. The medieval (pre-Reformation) church was, in many ways, the gradual re-institution of the Mosaic ceremonial law. Christendom was also, however, mutatis mutandis a Christian version of the Mosaic theocracy. I doubt that most contemporary Reformed theocrats (i.e., those who think that the civil magistrate should enforce both tables of the Ten Commandments) realize how much they are like the medieval church but they are inconsistent with their medieval forebears.

The theocrats I’ve known are all free-marketeers but their economics probably owes more to Hayek than they do to Moses. Medieval regulations against Christians charging interest to one another were grounded in passages such as Leviticus 25:36 and Deuteronomy 23:19–20. There must be a difference between “interest” and usary or else Matthew 25:27 makes no sense or makes our Lord a sinner. Nevertheless, the law of Moses (nor the prophets) does not seem to encourage free-market capitalism exactly. The free-market theocrats need to decide whether they will be faithful to the Chicago School or the Sinaitic school of economics. If they want to follow Hayek (as they should) then perhaps they will want to re-think the rest of their agenda too?

Finally, the “general equity” (WCF 19) of the Mosaic financial regulations is relatively simple: don’t steal. The Mosaic economy has expired with the death of Christ and thus both Christians and non-Christians are now under divinely-revealed, divinely-instituted principles or creational laws that govern things such as banking. Banking (and finances) generally are not autonomous, i.e., beyond the sphere of God’s revelation and sovereign control but he rules banking the way he rules politics and art and plumbing: through his providence. In banking, art, politics, and plumbing, we’re to act according to the revelation in nature (including the conscience) of his moral will. Bankers are not to steal. Usury (unjust interest rates) is a form of theft.

People are going to disagree what constitutes theft. Is it theft when credit card companies charge outrageous levels of interest? Perhaps but I guess that few people sign up for credit cards at the point of a gun. As we saw in the recent crash, credit card companies take considerable risk in making short-term loans, at a distance, with relatively little information about the borrower. High risk = high interest. Is it really theft if the interest rate balances out the risk? The desire on the theocratic right and left to sort out these kinds of issues on the basis of Pentateuchal law or even the NT is evidence of the QIRC.

Spheres such as banking or finances are essentially spheres of law not grace. One gets the impression that neither the religious right nor the religious left really understands this. To put it plainly, if you want grace: go to church (then of course, the church needs to adhere to its vocation as sketched above in the three marks). There is grace in the daily Christian life, of course, but common life is a legal sphere, a covenant of works. The loss of the distinction between the covenants of works and grace (or between grace and works generally) has led not only to theological confusion but also to ethical confusion as people attempt to turn common spheres into realms of grace.

That there is such a thing as a church-owned savings bank illustrates how far afield we can go when we lose sight of the mission with which the church has been entrusted. Reformed folk who talk blithely of “redeeming the city” and the like might want to take a lesson from the Roman church in Spain. Apparently it isn’t as easy as it looks.

    Post authored by:

  • R. Scott Clark
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    R.Scott Clark is the President of the Heidelberg Reformation Association, the author and editor of, and contributor to several books and the author of many articles. He has taught church history and historical theology since 1997 at Westminster Seminary California. He has also taught at Wheaton College, Reformed Theological Seminary, and Concordia University. He has hosted the Heidelblog since 2007.

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