January 9, 2006, - 3:21 pm
By Debbie Schlussel
Over the last month, many friends and readers have sent me links to articles about the University Bank (of Ann Arbor, Michigan) and its new Islamic banking division. Since then, Michael Savage has railed about it on his nationally syndicated radio show. Michelle Malkin and other bloggers have put in on their websites.
I didn’t write anything about it because it’s actually nothing new, but since I keep getting asked about it and about other commentators’ statements about it, I present to you a brief “myths & facts”–setting the record straight about this bank and what should and shouldn’t disturb you about it.
First, you must note the reason for the bank: Muslims are forbidden by shariah (Islamic law) from paying interest on loans.
MYTH: University Bank of Ann Arbor is part of the University of Michigan and, therefore, subject to church and state separations. (Michael Savage repeatedly made this claim.)
FACT: University Bank is completely a private-sector bank traded on NASDAQ, which services, among others, many students at the University of Michigan. It has no connection to the University of Michigan, so it is not subject to church and state separations.
MYTH: University Bank only allows Muslims to use the Islamic portion of their bank and the shariah-compliant home loans. Michelle Malkin asks (but does not state as fact) whether this is a “Muslim-only bank”. (It is a good question.)
FACT: It had better not be a Muslim-only bank, or it will violate federal banking laws prohibiting discrimination in lending. A great test to determine the answer to Michelle’s question would be for a non-Muslim to try and get one of these shariah-compliant loans. If the non-Muslim is turned down on any sort of discriminatory ground, I know a great lawyer who would love to take on that lawsuit (me).
The bank does appear to discriminate on the basis of religion in other areas, however. Its employees are ALL Muslims. Will they hire non-Muslims in face-to-face lending positions? I doubt it. If a non-Muslim is turned down for such a position, that is a good ground for a lawsuit. Where are the bank’s all-Christian and all-Jewish banking teams? University Bank would be sued big-time if they had these–and the government would shut the bank down.
I’m sure the bank will argue that Muslims won’t trust non-Muslims in this specialized shariah-based lending. Tough. Some Whites and Blacks won’t trust those of the opposing race, but a bank would have a hard time making that argument and defending its hiring choices in a legal forum and/or government EEO investigation.
Detroit’s FOX affiliate showed, in its gushing coverage of the bank, that it has a special prayer room facing Mecca, and allows Muslims to pray five times a day–at work. Do you know of any banks with church or synagogue facilities within, who allow their employees to pray several times during the business day? Will the bank do the same for its non-Muslim employees. Dont’ count on it. But, again, these are grounds for a lawsuit.
MYTH: University Bank’s shariah-compliant bank does not charge interest.
FACT: That’s what they claim, but it’s phony. Islamic law forbids the payment of interest, but the way this Islamic lending system is set up, it’s just a fraud. The bank utilizes a land contract for the Muslim customers to avoid paying interest, and instead, they pay monthly rental payments. The bank is in it to make money. The bank has to charge interest to recoup the investment and make a profit. Therefore, the monthly payments on the mortgage are set up to include interest for the entire period of the payments. They can call it whatever they want, but the customers are still paying interest, regardless of the semantics.
MYTH: University Bank’s Islamic financial services division is new and the first of its kind in the country to comply with shariah. This has been reported in a number of Mainstream Media publications and media outlets, like Business Week, Forbes, the New York Times, etc., etc., etc.
FACT: Banks all over the country have been offering these shariah-compliant, “interest-free” loans, and your tax dollars are subsidizing them. The most prominent is American Finance House–LARIBA, based in Pasadena, CA. Freddie Mac invested millions in LARIBA contracts.
Tags: Ann Arbor, bank, Bank of Ann Arbor, Debbie Schlussel, Detroit, federal banking laws prohibiting discrimination, Forbes, great lawyer, Mecca, media outlets, Michael Savage, Michelle Malkin, Michigan, Pasadena, private-sector bank, shariah-compliant bank, The New York Times, The University of Michigan, University Bank