USURY is defined in talmudic law as ‘wages for waiting’, that is, money paid for deferred repayment of a loan. Usury is viewed as a violation of the pentateuchal injunction (Exod. 22: 24; Lev. 25: 37). Rabbinic law extended the range of this injunction to include forms of commodity loans and mortgages. The line distinguishing the pentateuchal from the rabbinic injunction is not always clear, though the difference is far-reaching. While the courts will not enforce collection of interest on a loan that contravenes either a pentateuchal or rabbinic injunction, restitution is enforced only if a pentateuchal law has been breached.

The usury injunction covers five major areas: (1) money repaid at a later date, (2) commodities lent and repaid with increment at a later date, (3) deferred payments of purchase, if the price paid at the later date is higher than the one that obtained at the time of sale, (4) possessory mortgages, or antichresis, that is, the creditor takes possession of a house or field of the debtor for the period of the loan and resides there or utilizes his crop, without deducting the rent or produce from the principal, and (5) commenda, a silent partnership in which one person provides the capital, the other the initiative and labor.

Such restrictions posed serious obstacles to most forms of business enterprise or merchant and agricultural credit. Certain allowances are already to be found in the Talmud, and numerous (though not all) medieval commentators and jurists raised these allowances to normative status. Purchasing on credit was allowed with a price higher at the time of repayment than the one at the time of sale, on condition that no explicit statement was made at the time of sale that were it to be paid then the price would be lower—even though this was clearly understood. Some authorities ruled that symbolic deduction of rent or produce from the capital sufficed to allow possessory mortgages. Commendas were allowed if the active partner received symbolic wages.

The pentateuchal injunction forbade interest between Jews but allowed the taking or paying off to a foreigner (nokhri). Both Christians and Muslims were viewed as foreigners. Rabbinic law forbade such interest but made exceptions if no other means of subsistence was available.