-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!