Can we start a Judeo-Christian Bank?

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Recently our friend Chris Adams (Navy Chaplain, Newport, RI) posed this very question out of a desire that he would rather pay someone he knows and trusts interest on his mortgage instead of his mortgage bank. Further, he quoted this article:

Christian Motivational Speaker Starts Bank in Response to the Rise of Cancel Culture in the Private Sector: https://link.theepochtimes.com/mkt_app/christian-motivational-speaker-starts-bank-in-response-to-the-rise-of-cancel-culture-in-the-private-sector_3895330.html

So, a potentially added benefit of having a Christian bank, is that one couldn’t be “cancelled” out of use of credit for standing for a Christian cause, such as being pro-life.

So, what about it? Can we start a Judeo Christian Bank? Do we want to? Why or why not?

The answer is yes, anyone can start a bank if you get a bank charter, meet the capital requirements, and all the “banking” regulations. You can do this in a variety of ways. You can start de-novo. You can buy an existing bank. You can create a credit union which is a close cousin of a bank, but it is cooperatively owned by the affiliate group that creates a membership (getting warmer). However, anything called a “bank”, “thrift”, “savings and loan”, or “credit union” are ultimately regulated by the Federal Reserve, OTS and/or state regulators serving a similar function. That is because they use a system called “fractional reserve banking” where depositors deposit their money and the bank determines who to “lend” to using their own credit decision making criteria. Borrow money from a depositor at 1% interest, the bank has to keep only 10% of the deposit and gets to lend 90% of the money to say a business at 10% interest. Hence, the bank makes a 9% spread. You get the idea.

However, because of the risk of these loans failing, regulators have very strict requirements of any bank conducting such fractional banking practices. The regulators and the government have set up insurance entities such as the FDIC (Federal Depository Insurance Company) to insure depositors against the risk of any bank making “bad loans”. In other words, the regulators in an effort to try to protect depositors and taxpayers from “bailing-out” or “bailing-in” the banks (due to “bad loans”) are very strict with how money is lent out. But most importantly, the regulators require the following banking practices be performed, which make for good business and profit, but which go directly against what the scriptures teach us to do:

Why starting a Christian regulated “bank” may NOT be God’s best and highest:

Gregg, I care more about how you make your money, than what you do with it” – 2009

Banking Regulations

Ful-recourse loans, ideally secured by assets

  • At the end of every seven years you must cancel debts. Deut 15:1
  • the master called the servant in. ‘You wicked servant,’ he said, ‘I canceled all that debt of yours because you begged me to. Shouldn’t you have had mercy on your fellow servant just as I had on you? Matthew 18:32-33
  • if … a wicked person… turn[s] away from their sin and do[es] what is just and right—if they give back what they took in pledge for a loan… Ezekiel 33:14-15

Loans must be made at interest

  • You shall not charge interest on loans to your brother Deut 23:19

Loans are to be made to the best credits – i.e. the wealthiest, most credit worthy customers

  • And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. Luke 6:34

Strict regulation of sub-prime credits, where more interest and fees must be charged to “risk-adjust” a less stellar credit

  • Whoever increases wealth by taking interest or profit from the poor amasses it for another, who will be kind to the poor.” Deut 28:8

No lending to bad credits

  • But love your enemies, do good to them, and lend to them without expecting to get anything back Luke 6:35

Lending must be “arms-length”, the definition of which includes no special terms in lending for those you know or want to help personally

  • If anyone is poor among you… do not be hardhearted or tightfisted toward them. Rather, be open handed and freely lend them whatever they need. Deut 15:7-8

Credits need to be scored by commercially accepted methods – i.e., FICO scoring (debt history and strength of income / balance sheet) is more important than personal knowledge / reputation and character.

The Storehouse Strategy:
How it differs from traditional banking

Full reserve banking – it’s your money, you decide how to give, invest or spend it

More of a payment platform and human exchange to facilitate biblical economy and discipleship (than a way of passively making a profit and/or impersonally getting the use of money at a price)

Biblical lending, which is non-recourse, non-interest bearing

Trusting God instead of man

Giving and receiving rather than contractual obligation

The wicked borrow and do not repay, but the righteous give generously

Psalm 37:21

Voluntarily providing returns to those who lend or “invest” in you, either out of your desire to bless back and/or out of your profit

When lending to others, you are making the decision to trust God and the community instead of making money off of other people’s backs (the borrower is slave to the lender)

Common funds such as the “Storehouse” or “Joseph Funds” pool assets together for good in the community and to advance the Kingdom together (Acts 2 & 4)

More Reason to go Storehouse
(instead of traditional Bank)

Part of our responsibility here I believe will also be to pray for the breaking of the mindset your parents generation and many others have.  The real risk here is staying in the current system which at some point will be demolished versus shifting out now while there is time. (the crux of Gregg’s passion and teaching). Very similar to the warning Jesus gave in Luke 23:27-29.

While it is not really relevant to this I was part of a group that formed a National bank back in the late 80’s which was ultimately sold and just because we could call one Judeo-Christian, to Gregg’s point it would still be erected inside the corrupt system.  A very complex process.  I have found in my own walk that once my heart was repentant and yielded to the desire to get out of the system, the Lord made a way, but you will not be able to keep a foot in both camps. 

So I pray that their hearts would be moved to further consider your suggestion and the same would befall others in the New England area. To ask “what then must we do” and then I believe the Lord will move and be glorified through the Storehouse movement.  Good discussion gents and blessings on this day!  In the meantime my counsel is to wait on the Lord.

PS: If you want to pay the loan off sooner you don’t need a new financial vehicle to do that, just increase your payments to join your hand to your heart.

Gary Crawford to Chris Adams and co July 11, 2021