Posek

A posek (plural poskim) is a rabbi recognized as competent to decide how halacha, Jewish law, applies to real cases. When a person, a community or a business is unsure how Jewish law applies to a practical situation, the question is brought to a posek, whose answer, called a psak or psak halacha, tells them what to do. The word comes from a Hebrew root meaning to decide or to cut off, reflecting the role of bringing a question to a conclusion.

Poskim rule on every area of Jewish life, from prayer and dietary law to family matters. A significant part of their work concerns money: lending and interest, partnerships, contracts, charity, the sabbatical year and business conduct. For Jewish individuals and institutions operating in modern finance, the rulings of poskim determine which structures are permissible.

A posek works from a layered body of sources. The foundation is the Torah and the Talmud, followed by the commentaries of medieval authorities and the major legal codes. The most influential code is the Shulchan Aruch, compiled by Rabbi Joseph Karo in the sixteenth century, together with the glosses of Rabbi Moses Isserles, which record Ashkenazi practice. Its section Choshen Mishpat covers civil and monetary law, while the laws of interest appear in the section Yoreh De'ah.

Applying these sources to new circumstances requires judgment. A posek considers earlier rulings, the customs of the community, the facts of the case and, where authorities disagree, established rules for deciding between them. Many important rulings are published as responsa, written answers to questions, which in turn become sources for later poskim. Rulings by a recognized senior posek can be followed by whole communities, while a local rabbi acts as posek for everyday questions in a congregation.

Financial questions brought to poskim include:

• Interest: Jewish law prohibits charging or paying interest between Jews, a prohibition known as ribbit. Poskim decide how this applies to bank accounts, mortgages, credit cards, late-payment fees and business loans, and whether a structure such as a heter iska, which recasts a loan as a form of investment partnership called an iska, may be used.
• Debt and the sabbatical year: the cancellation of debts in the shmita year and the use of a prozbul, a document that preserves the right to collect them.
• Charity: the calculation of obligations such as tzedakah and the operation of free-loan funds, known as a gemach.
• Commercial conduct: fair pricing, competition between businesses, employment obligations and honesty in trade.

A posek answers questions about what the law requires. A dayan is a judge who sits on a beit din, a rabbinic court, and resolves disputes between parties, for example a commercial disagreement between two businesses. The functions overlap, since a dayan must also know the law and a senior posek may serve on a court, but the roles are distinct: a psak guides conduct, while a beit din ruling decides a case between litigants. In many countries, parties may agree to arbitration before a beit din, and the resulting award can be enforceable under ordinary arbitration law.

Islamic finance has a similar structure of religious authority over financial practice. A scholar issues a fatwa on whether a product complies with Islamic law, and Islamic banks appoint a Sharia supervisory board to approve products, partly because of a shared concern with interest, known in Islam as riba. Jewish financial institutions have fewer formal governance requirements of this kind, but banks and lenders serving observant customers often obtain rabbinic approval for documents such as a standard heter iska, and some institutions retain a rabbinic adviser. Debates about interest in both traditions reflect a long history of rules on usury.