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Ann Arbor bank creates subsidiary for Muslims
AP/mlive.com ^ | 1/2/2006, 12:38 a.m. ET

Posted on 01/02/2006 7:56:51 AM PST by quantim

ANN ARBOR, Mich. (AP) — A bank that has been offering special services for Muslims for two years has now formed a subsidiary to focus solely on the religious group.

The Ann Arbor-based University Bank has created University Islamic Financial Corp. to offer Muslims home financing, deposit accounts and Islamic mutual fund shares.

"The formation of the subsidiary allows us to have a financial institution which is 100 percent in compliance with the Muslim Shariah, the legal code of the Islamic religion," bank President and Chairman Stephen Lange Ranzini told The Ann Arbor News for a Saturday story.

Among the laws of Shariah is a ban against paying or receiving interest.

The bank's Islamic deposit accounts allow Muslims to open accounts where any profits are shared rather than paid as interest.

University Bank also offers a mortgage alternative loan transaction program — or MALT — which replaces a traditional home loan with a redeemable lease.

The bank holds the home in trust, and a home buyer makes monthly payments to that trust. Each rent payment includes a set amount of savings, which builds the buyer's equity in the home. When the savings account equals the home's original purchase price, the buyer owns it.

The mortgages are offered across the state, with 57 families in the Detroit area having such loans, and Ranzini said plans are to offer such mortgages nationwide.

Other banks also are targeting Muslims, said Tracey Mills, a spokeswoman for the American Bankers Association trade group.

"There have been other banks that have formed relationships with the Islamic community, developing lending products that aren't in violation with Islamic law," she said.

The Institute of Islamic Banking & Insurance, an independent Islamic finance academic and research group in London, shows that more than 250 Islamic banks around the world manage more than $200 billion.

Ranzini said University Islamic Financial Corp. will allow the University Bank to expand its capital base. He expects the bank, a subsidiary of the Ann Arbor-based University Bancorp financial holding company, will double its assets, which were listed at $56.5 million on Sept. 30.

He said the corporation was formed with $15.5 million raised through the sale of 40,000 shares of private stock.

The bank owns 80 percent of the corporation while the remaining 20 percent is held by Virtue Investors LLC, a group of private investors from Grand Rapids, Ranzini said.


TOPICS: News/Current Events; US: Michigan
KEYWORDS: annarbor; banking; islam; jihad; muslimamericans; sharia
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To: quantim
HSBC has had such a brand for years, it's Amanah Finance Group, some products of which are available in certain United States locations.

Specifically it offers Murabaha mortgage loans, which are Shariah compliant.

Basically the interest is just pegged into the transaction as a fake sell price for the house. I found this info on another website:

How it works

This isn't totally new to the U.S. market. I first blogged about this stuff in July of 2002.
21 posted on 01/02/2006 8:22:05 AM PST by Fixit (http://comedian.blogspot.com)
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To: mlc9852

They probably have penalties for early withdrawal.


22 posted on 01/02/2006 8:22:48 AM PST by Paleo Conservative (Happy New Year!)
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To: CaptRon

Naw, you missed it. I had to read it several times. See post 8.


23 posted on 01/02/2006 8:27:32 AM PST by EBH (Never give-up, Never give-in, and Never Forget)
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To: knarf
I forget the town,

Hamtramck.  It used to be an old Polish town, taken over by muzzies.

24 posted on 01/02/2006 8:28:05 AM PST by quantim (The Senate proves itself daily as the flagrant flaw in the Constitution.)
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To: quantim

I have a sneaking suspicuion that this will come back to bite this bank in the butt.

Somewhere down the 'pike, it will probably be proven that the funds are being used for terrorist cells in the US.


25 posted on 01/02/2006 8:28:09 AM PST by DustyMoment (FloriDUH - proud inventors of pregnant/hanging chads and judicide!!)
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To: Fixit
100 percent in compliance with the Muslim Shariah,...and a home buyer makes monthly payments to that trust.

I'd hate to be late on that payment, amputation or stoned to death.

26 posted on 01/02/2006 8:30:37 AM PST by quantim (The Senate proves itself daily as the flagrant flaw in the Constitution.)
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To: quantim

They beat Madison, Wisconsin to the punch!


27 posted on 01/02/2006 8:36:30 AM PST by Wally_Kalbacken
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To: Paleo Conservative

LOL


28 posted on 01/02/2006 8:38:40 AM PST by mlc9852
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To: quantim
A bank that has been offering special services for Muslims for two years has now formed a subsidiary to focus solely on the religious group. The Ann Arbor-based University Bank has created University Islamic Financial Corp. to offer Muslims home financing, deposit accounts and Islamic mutual fund shares."

The bank is FDIC insured, but I wonder if FDIC is also ensuring the subsidiary? It would be interesting to know what FDIC's policy is on insuring institutions that are formed solely to focus on religious groups and provide them special services.

29 posted on 01/02/2006 8:40:08 AM PST by Starboard
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To: EBH

thats my point

there is no such thing as a free lunch

if there is no interest, then they hit you hard on fees or some other compensatory charge. being a bank its charges.


30 posted on 01/02/2006 8:43:19 AM PST by jackson29
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To: kjo

The Hash Bash;

The Michigan Mile;

God I loved college!!!

but I had to grow up and get a real job... pity.


31 posted on 01/02/2006 8:54:58 AM PST by Mikey_1962 (I grew up in a slum, when I got to college it had become a "ghetto".)
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To: jackson29

They also say that they don't pay interest, either, though. So if they can get enough Muslims to deposit money at their bank at no interest, they will have lots of money to loan at no interest. But in reality, the money is likely to be funnelled into loans by the parent bank to non-Muslims who pay interest. To me, it sounds like a gimmick to get Muslims to deposit money at their bank, at no interest.


32 posted on 01/02/2006 8:58:19 AM PST by Brilliant
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To: quantim
I spent the night at a friend's house off Caniff and got awoken at 5am by the call to prayer.

The next day I saw the Catholic School they had bought.

About 300 grown men milling around with the school kids!!
Weird!!

They had chiseled the Four Evangelists off the front of the school.
33 posted on 01/02/2006 8:58:45 AM PST by Mikey_1962 (I grew up in a slum, when I got to college it had become a "ghetto".)
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To: Brilliant

Interest -- No.

Discount Rate -- Yes.

(Simplified, but mostly accurate.)


34 posted on 01/02/2006 9:02:01 AM PST by Fixit (http://comedian.blogspot.com)
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To: Brilliant

strikes me as similar to a ponzi game, this is just another money game

here , who ever thought it up & wherever he is, benefits


there is no such thing as a free lunch


35 posted on 01/02/2006 9:03:05 AM PST by jackson29
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To: quantim

And America sleeps....


36 posted on 01/02/2006 9:05:07 AM PST by sageb1 (This is the Final Crusade. There are only 2 sides. Pick one.)
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To: CaptRon
Or am I missing something?

Works like this:

Muslim finds a house for sale; price $100K

goes to bank and strikes a deal with or without down payment.

Bank buys house for 100K and leases to Muslim.

Muslim pays bank $1000.00 a month rent of which $278.00 is set in savings for the Muslim.

Muslim pays for 30 years and the house is his.

The bank has recovered its 100K from the savings account, has had the tax write off for the house for 30 years and has a significant proffit from the actual $722 rental it received.

The proposition is on the order of a contract for deed or a very prolonged lease with purchace option.

37 posted on 01/02/2006 9:13:36 AM PST by Lion Den Dan
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To: knarf
This map is now outdated.  More Mosque's have sprung up across the US since this map was published.


38 posted on 01/02/2006 9:18:34 AM PST by SheLion (Trying to make a life in the BLUE state of Maine!)
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To: mlc9852
When do the homosexuals get their own bank?

When the market demands it.

Stories like this make it easy to separate the small-l libertarian free-marketeer Republican like myself from the more nativist and authoritarian strains.

39 posted on 01/02/2006 9:20:07 AM PST by SolidSupplySide
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To: Lion Den Dan
Isn't this the kind of loan the Clintons ran at Whitewater?

People were paying toward a house. But if they missed a payment the deal was off. The Clintons kept all the payments *AND* owned the house. To be fair to the Ann Arbor bank, I'm not convinced that their Muslim banking program is as unethical as the Clintons' behavior at Whitewater.

40 posted on 01/02/2006 9:27:00 AM PST by SolidSupplySide
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