Masechet Bava Metzia, Perek Vav, Mishnah Zayin. When a person gives a loan to somebody else, he is allowed to take a security deposit. He is allowed to take something to make sure that he gets repaid. If he does not get repaid, then he can use the object that he took as security to compensate himself for what he is owed. We will talk about the status of the item that the lender is holding as security during that time.
The Mishnah says that if somebody lends somebody against security, the lender took an item that the borrower had in order to guarantee his loan. The lender here would be considered a Shomer Sachar (paid guardian) because of the security item he is holding. Even though the lender is not being paid to watch the item, he benefits from it in some way. The Halacha (Jewish law) is that somebody who is engaged in a mitzvah would be exempt from another mitzvah. So this person is doing a major mitzvah by giving out a loan, a mitzvah De'oraita (biblical) of helping somebody by giving them a loan. During that time, he would be patur, he would be exempt from giving tzedakah, and he would not have to give charity. Therefore, the person who gave the loan is saving money by not giving charity, by not giving tzedakah. The benefit he gets from taking this security is, in a way, saving him money. So he is considered someone who benefits from the security and is a Shomer Sachar, and therefore he would be obligated if he lost the item or it was stolen.
Rabbi Yehuda disagrees. Rabbi Yehuda makes a distinction between the different types of loans. He says, “If you lend someone money against security,” then the lender is considered an unpaid Shomer for the security item, because the benefit of being exempt from giving tzedakah for that short time is not enough to make the lender a Shomer Sachar. In this situation, according to Rabbi Yehuda, he would only be exempt for that mere moment while he is giving the loan, while he is engaged in this mitzvah. It is such a small benefit. It is unlikely that he will be asked to give tzedakah at that exact moment, and he is not really going to save money. The possibility that he may save money in that way if somebody asks him for tzedakah is not enough to consider him a Shomer Sachar. Therefore, he is a Shomer Chinam (unpaid Shomer), who is not responsible if the item is lost or stolen. But if he lends somebody produce, fruits, against security, he would be considered a Shomer Sachar for the security. In this situation, the lender benefits from the loan. The produce he had would have rotted if it had stayed with him. So he lent out produce to somebody else. The produce would have spoiled with him. That person took care of it, and he is going to repay him with fresh produce. He is going to take care of him with new produce. That is why the lender benefits here. Therefore, he is considered a Shomer Sachar for the money he is watching, which was the security.
Now we will mention another halacha about a lender who is holding an item as security. Abba Shaul says that a person who lent money to a poor person and took security to guarantee that he gets his money back is allowed to rent out the poor person’s security to others to help him, without his knowledge. What do we mean by that? “Lihyot posek alav v'holech.” The lender could set a rental fee for the item and rent it out. He could take the rental income he gets for the mashkon, for the security that he's holding of that poor person, and deduct it from the poor man’s debt. Even though it is generally forbidden to use the item he is holding as security, if he rents it out in this way, helping the poor person, it is allowed. We consider it like he is returning a lost object to its rightful owner. By renting out the security item here and gaining money—passive income—for the person who took the loan, he is giving the borrower money that he would not have had if the lender had not done this for him. The borrower is poor, so we assume he would be okay with this type of arrangement. He would be okay with renting out his item even if he does not know about it. So we are helping him out. We are helping out this man, and that is a permissible action in order to keep him safe. On lowering and deducting from his debt.