Please note that the resulting ‘‘implied’’ interest rate is not uniformly
the same. It differs from one car to another, based on the leasing rate the
same car would bring in the relevant market. If the rate of return on invest-
ment is higher than the rate of return expected by the investors, the RF
banker encourages the family to buy the car and would unilaterally reduce
the monthly rental rate obtained from the market so that the monthly pay-
ment would compete with that offered by riba-based conventional banks. If
the rate of return on investment was calculated to be much lower than that
expected by investors, the RF banker would inform the family that buying
this car is not a good investment, and the financing would be declined.
In the RF banking environment, the RF banker encourages the family to
pay their car off as quickly as possible in order to reduce the burden of debt
on the family’s cash flow and free more money to save for the future.
LOOKING FOR A SUITABLE BANK TO ACQUIRE
In 1989, we started searching for banks available for sale. We stumbled into
a report called theFindley Report,^1 which is published by a prominent
banking law firm in Southern California. The firm was started by a leading
California attorney who specialized in helping communities obtain charters
for community banks. TheFindley Reportis an amazing source of banks’
financial information and great reading material for me. We all pored over
it and studied the financials and profitability of many banks.
In 1989, after feeling more comfortable that the concept of RF financ-
ing works and that there was demand for RF financing—and knowing that
we were really hurting for more capital—we began to consider buying a
small bank. We called for a meeting with Mr. Findley, Sr. He invited us to
his rather humble office in the city of Yorba Linda (in Orange County, Cali-
fornia) and sat us down. After the niceties of introducing ourselves and
briefing each other on what we do, he looked us in the eyes and shocked us
by saying, ‘‘There are three reasons that I know why someone would like to
own a bank: The first is that he/she is stupid, the second is that he/she wants
to put hands in the ‘cookie jar’ and taste from it—’’ (by this, he meant using
the bank money for personal benefit) ‘‘—and the third is that they are genu-
inely interested in serving people in the community without expecting any
rewards or recognition.’’ I was quiet for a few seconds and came back di-
rectly by saying that we belonged to the third group. We told him that our
passion was to build a bank that will serve the community. He apparently
believed us, and introduced us to his son, who was also an attorney in the
same field—the honorable Gary Steven Findley, Esq. who runs the firm to-
day. We became good friends and developed mutual trust and rapport.
Starting an RF Bank in the United States 285