Banking Options in the American-Muslim Community

Source: Los Angeles Times

On March 17, 1999, the Los Angeles Times published anarticle on the organizations in the United States that are trying tooffer American Muslims a way to conduct their financial affairs inaccordance with Islamic law. Since the Qur'an and the Sunnah forbidMuslims to pay or receive interest, many devout Muslims are at oddswith contemporary financial mores. Though Islamic banking systems nowoperate throughout the Muslim world, they withered under colonialrule and have only made a comeback in the last 20 years. Institutionslike American Finance House and MSI Financial Services are two ofonly a dozen companies to offer Islamic banking in the United States.They run like limited partnerships where "depositors" are really"shareholders who earn dividends when the bank turns a profit, or wholose a portion of their savings if it posts a loss." Their loanoperations function like Western-style leasing and rent-to-owntransactions. Investing in the stock market is allowed, but no stocksmay be held in companies that engage in activities relating toliquor, gambling, pork consumption, or pornography. Presently, theUnited Bank of Kuwait is trying to enter into the American market tooffer widescale Islamic financial services.