-Submitted by David Drumm (Nal), Guest Blogger
in 2004, in an effort to increase minority home ownership, then-Gov. Pawlenty urged the Minnesota Housing Financing Agency (MHFA) to partner with local groups and businesses. The MHFA partnered with the African Development Center (ADC), developing culturally sensitive financial products that would allow Muslims to own homes. Sharia (Islamic law) prohibits the payment or acceptance of interest fees for loans of money. Charging interest on loans is also forbidden according to Jewish law.
With Sharia-compliant financing, a mortgage may consist of a bank buying the property and then reselling it at a profit, while allowing the buyer to pay on an installment plan.
The effort fizzled when the ADC couldn’t find interested home buyers who were credit ready. According to Megan Ryan, a spokesperson for the MHFA, the ADC issued only three loans before the pilot program was shut down and the $8 million transferred to other loan programs.
A Pawlenty spokesman is now claiming he shut down the program when he learned about its Sharia roots. I’m sure Pawlenty was concerned with the entanglement of religion and government.
The Thomas More Law Center (TMLC) is also concerned with violations of the Establishment Clause. In Jan. 2011, federal district court Judge Lawrence P. Zatkoff ruled against TMLC and its claim that the government’s 80% share in AIG’s Sharis-compliant financing products violated the Establishment Clause. The TMLC is the same organization that has repeatedly opposed the removal of the Ten Commandments and other religious monuments. Oh, the irony!
Sharis-compliant financing products have become a large profit vehicle for financial institutions such as Citibank and Visa. Now, the right wing wants to regulate how these corporations make their profits. Oh, the irony!
While I am 100% against government involvement with shariah-compliant anything (though there already is much of that),I have a problem with the Thomas More argument about “violations of the Establishment Clause,” which I think will only backfire in the longrun. For ex, in the Murfreesboro mosque case, the Obama DOJ wrote an amicus arguing that “Islam is a religion” and to suggest otherwise could be criminal. The counterjihad/anti-sharia side of course wants to argue the opposite (which I support), that it’s not primarily a religion, though it is that too. There’s just an inconsistency of approach here & people need to seriously think this through, both the facts & the implications. They should also consider why some Muslim countries themselves have fought to keep shariah out of government.
The Catholic Church even charges it’s own parishes interest.
The Dark Ages church also banned lending for interest – except the church did it. The church was a very stingy lender and charged exorbitant interest rates. Add in laws preventing Jews from owning property in Europe and you begin to understand why money lending became an important industry in the Jewish community.
So all three of the Middle Eastern religions forbade lending for interest but only one still carries it on today. I’m more interested in how that affects the economic stability and growth of those populations.
“Charging interest on loans is also forbidden according to Jewish law.”
Only charging interest to fellow Jews and that has fallen by the wayside even in Orthodox communities.
“A Pawlenty spokesman is now claiming he shut down the program when he learned about its Sharia roots.”
Sure … that’s why. Just like Palin said, “Thanks, but no thanks” to the bridge to nowhere …
puzzling,”Why is the government running loan programs in the first place?” Minnestota Housing finances and advances affordable housing for low and moderate income people. They have done an incredible job and run one of the best programs in the country.
Why is the government running loan programs in the first place?
In Islam there appears to be a broader understanding of the level of fraud inherent in our current debt-based monetary system. High interest rates exist because “money” is constantly losing its value to inflation, requiring those who have saved to speculate and chase risky investments to keep up.
Inflation lowers the real value of our $14T national debt every year, but even a modest increase on the required interest rate to maintain this borrowing will collapse the system by consuming a huge swath of government revenue.
Here’s a segment on sound money in Islam:
It is and it isn’t…it promotes home ownership based upon historical perspective rather than forcing our culture and ways into them…..
Does having alternative languages on a ballot make it an entanglement as well? These are tricky issue and so long as the money is not used in any fashion other than buying a house etc….then what’s the hey….
The scenario I see..It is pre-capitalized interest….due and payable….if the house was paid for over time then that is what they would pay….if the house is sold before that time then….use the Present value relation to purchase price and they pocket the difference…It is tricky but I do believe that it could and should work….