Posted on 08/31/2010 12:42:20 PM PDT by bronxville
University Islamic Financial Corporation Joins AAOIFI, the Global Islamic Finance Accounting Standards Setting Organization
ANN ARBOR, MI—(Marketwire - November 12, 2008) - University Bank (NASDAQ: UNIB) today announced that its 80% owned subsidiary, University Islamic Financial, has joined AAOIFI, the global Islamic Finance accounting standards setting organization, as a full member. AAOIFI is responsible for developing accounting, auditing, ethics, governance, and Shari’a standards for the international Islamic banking and finance industry. AAOIFI is supported by over 160 institutional members from around 40 countries. It has its corporate office in Kingdom of Bahrain. More information about AAOIFI and its programs and standards is available at http://www.aaoifi.com/.
University Bank & University Islamic Financial’s President & Chairman Stephen Lange Ranzini stated,
“AAOIFI is setting the global standards for Islamic Banking Sharia’a standards. University Islamic Financial wants to serve as the model in the United States for operating 100% in compliance with the Shari’a. Our membership in AAOIFI will assist us in that ambition.”
About University Bank
Ann Arbor-based University Bancorp owns 100% of University Bank which, together with its subsidiaries, holds and manages a total of $5.8 billion in loans and assets. University Bank is an FDIC-insured, locally owned and managed community bank, and is the only financial institution headquartered in Washtenaw County rated “Outstanding” by the FDIC for Community Service and Community Reinvestment through its creative and innovative services to meet the financial needs of its community.
University Bank also engages in Islamic Banking through 80%-owned University Islamic Financial Corporation, the first and only Islamic Banking subsidiary of a bank in the U.S.
University Islamic Financial offers residential and commercial real estate financing, the only FDIC-insured Islamic deposits (offered through University Bank) and Islamic equity mutual funds (offered through University Insurance & Investments). University Bank also specializes in mortgage subservicing and mortgage origination primarily serving over 250 credit unions (representing 2.6% of all credit unions in the U.S.) through its Houghton-based 80%-owned subsidiary, Midwest Loan Services, Inc. University Insurance & Investment Services is a 100%-owned subsidiary that provides a full range of insurance services as an independent agent for 49 insurance companies and investment brokerage account services. University Lending Group is a Farmington Hills-based 50.01%-owned subsidiary that originates HUD’s FHA and VA and other mortgage loans on a wholesale and retail basis.
http://www.marketwire.com/press-release/University-Islamic-Financial-Corporation-Joins-AAOIFI-Global-Islamic-Finance-Accounting-NASDAQ-UNIB-919641.htm
That’s my #1 reason for getting off oil asap.. We’ve basically funding our suicide with it.
“University Bank is an FDIC-insured, locally owned and managed community bank, and is the only financial institution headquartered in Washtenaw County rated “Outstanding” by the FDIC for Community Service and Community Reinvestment through its creative and innovative services to meet the financial needs of its community.”
If this is a “religious” aka “sharia” banking system how come the FDIC backs it?
COMING TO AMERICA: MUSLIM-ONLY BANKS?
By Michelle Malkin • January 5, 2006 03:42 PM
Check this out:
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.
http://michellemalkin.com/2006/01/05/coming-to-america-muslim-only-banks/
Again, how can this be backed by the FDIC? Jews and Christians used to have the same banking laws and had to get rid of it - centuries ago. I believe this is relatively new to islam.
“I believe this is relatively new to islam.”
Meaning that they’ve just taken it on again after centuries without it. The Muslim Brotherhood?
What would the rent be and how does the rate compare with what the rest of us pay? Is it a fixed rate? The problem with this whole ban on interest is that apparently under shariah, is that it would seem to offer a strong limit on markets. Their short term loans can have a profit, but it’s fixed, so is only good for short term loans. But for long term loans, their only way out is based on this rent to own idea backed on real estate assets. No wonder they’ve flopped in the UK!!!
It’s not only insured by the FDIC but the “Islamic Product” is sold to Fannie Mae!!!
Michigan bank operates by Islamic law
Jeff Karoub,Sebastian Abbot,
Associated Press
Tuesday, January 20, 2009
Big financial institutions have been battered by mortgages gone bad. But a tiny Michigan bank is getting attention in the industry by turning a profit on loans without even charging interest.
It also rules out some of the activity that got Western finance in trouble - subprime mortgages, credit default swaps and the like.
“When you look at the economic crisis we’re in, if you were to follow Islamic or Sharia financing, you couldn’t have this crisis,” said John Sickler, corporate director for the bank, University Islamic Financial Corp. in Ann Arbor.
Islamic finance operations aren’t prohibited from making a profit. Far from it. Instead, banks that comply with Islamic law, or Sharia, earn money from fees that are part of the cost of the loan, some paid up front and some over time.
University Islamic Financial has two types of financing: one called a marked-up installment sale, the other a lease-to-purchase sale. Fees in both cases are comparable to interest payments in traditional loans, bank officials say.
For example: A seller who bought a house for $100,000 could sell it for $120,000 or even $300,000, provided that the buyer agrees it’s a fair deal. The home could be sold on an installment plan negotiated by buyer and seller.
The bank is a subsidiary of Michigan-based University Bank, and its leaders say they have talked recently with executives from two national banks hoping to learn more about the business.
Islamic law says money cannot grow by itself, the way it does with compounding interest. Trade is acceptable as long as the equal amounts of money are traded or two different things are swapped with a fairly negotiated price.
So a dime for an apple would be considered halal, or religiously acceptable, while one apple for two apples would be harem, or unacceptable.
Even at University, not everyone is on board. Some customers have closed their accounts when they learned that it was engaging in Islamic finance. Some employees who objected to the move quit. The bank also stopped having a Christmas party and no longer serves alcohol at after-hours events.
The Michigan bank focuses on contracts that clearly spell out the risk and reward between lender and borrower. University Islamic Financial says it’s the nation’s first to offer Sharia-compliant, federally insured deposits.
Islamic banking is more common overseas, but some U.S. banks and credit card companies are exploring the idea of branching out into Sharia products to reach out to the growing Muslim population.
So Islamic banking is only expected to increase in coming years. Already, Citigroup offers Sharia products and services to clients overseas, and Visa says it has worked with banks around the world to offer Islam-compliant products.
The conventional banking system could learn a lot from the idea, said Jawad Ali, a finance lawyer based in Dubai and London who specializes in structuring Sharia-compliant deals.
“We haven’t made as much money as the conventional banks because we can’t, for example, sell what we don’t own,” he said. “We have to own it before we sell it. We may have missed out on gains in good times ... but we haven’t suffered any losses.”
Of course, there’s no guarantee that banks will find immunity in Islamic finance from a severe global downturn.
“I am not doing banking on Mars,” said Afaq Khan, the head of Saadiq, the Islamic banking arm of Standard Chartered Bank, in London. “If real economic activity slows down significantly, the Islamic banking industry will also be affected.”
A Sharia-compliant mortgage is like rent-to-own: There is no note, or mortgage, but typically part of each month’s payment is held toward the ultimate purchase. The property is titled to an individual trust, or limited liability corporation.
Deutsche Bank estimates total assets in the Islamic finance market at $1 trillion - a tiny fraction of global financial assets, but the bank said in a recent report that the sector has been growing at a clip of 15 to 20 percent per year.
Most big international banks already have Islamic banking arms, and a November report by Moody’s Investors Service shows that Islamic banks have been fairly resilient to the global economic downturn.
The U.S. banking industry has not embraced Sharia banking. Wachovia, Wells Fargo and JPMorgan Chase said they have not adopted Sharia practices and declined to comment about what they may do in the future.
“As far as the future, we are always looking for opportunities to better serve our customers, but our specific strategy is proprietary,” Wells Fargo spokeswoman Lisa Westermann said.
http://islaminaction08.blogspot.com/2009/01/michigan-bank-falls-to-islam.html
“Even at University, not everyone is on board. Some customers have closed their accounts when they learned that it was engaging in Islamic finance. Some employees who objected to the move quit. The bank also stopped having a Christmas party and no longer serves alcohol at after-hours events.”
So, in essence, this bank is actually University Islamic Bank. The Ranzini family make nice little dhimmis. I wonder whose of their board...
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