Islamic finance in the US: Banks are not the solution

By Kal Elsayed. First published in Islamic Finance News, 30 March 2022.

The founding fathers and early presidents warned against usury and the banking practices that became the modern financial system, and John Adams equated debt with the sword. Homeownership is still the American dream and the main way most families build wealth, but for Muslim Americans a home bought through the conventional system meant taking part in riba. Bank subsidiaries that carry Islamic names remain extensions of their banks, and AMJA, an independent body of US scholars, found their contracts fall short. Guidance Residential answers this with a non-bank, riba-free co-ownership program developed with multiple law firms and Freddie Mac and built on 5 principles: rooted in divine law, economically just, circulating wealth, asset-backed and sharing risk.