allocation would be dynamic and would change as the economic projec-
tions change.
Risk Management through Diversification by Geographic Location Close atten-
tion should be exercised by the RF bank regarding the locations it is inter-
ested in serving. For example, if one isin the United States, risk factors
should be assessed for different markets in different towns, cities, and states
to determine how much of the bank’s money should be allocated in each
location, based on that risk factor, without any discrimination or violation
of the tenets of the Community Reinvestment Act (CRA). It is important to
ensure that hidden discrimination is not practiced by denying lower income
communities the services offered by the RF bank; all communities must be
served in a fair and balanced way.
NOTES
- Yahia Abdul-Rahman,Strengthening Investor Confidence in Islamic Finance,
Attracting Investors to Invest in Islamic Financial Institutions and Instruments
in the US & Canada, speech delivered at Monash University 5th Annual Islamic
Banking Conference, Mandarin Oriental Hotel, Kuala Lumpur, Malaysia, Sep-
tember 3–4, 2007. - Many of the video training programs cited in the Bank Open University training
program are designed and produced by Bankers’ Hotline, http://www.bankersonline.
com/bin/bhhome.html. - The USA PATRIOT Act, commonly known as the Patriot Act, is a controversial
Act of Congress signed into law by former President George W. Bush on Octo-
ber 26, 2001. The contrived acronym stands for ‘‘Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism.’’ For more details please visit the official U.S. government Web site:
http://www.fincen.gov/pa_main.html. - Ibid.
- FinCEN is The Financial Crimes Enforcement Network, which is one of the
U.S. Department of Treasury’s lead agencies in the fight against money launder-
ing. It serves as a link between the law enforcement, financial, and regulatory
communities. Please visit the Web site at http://www.fincen.gov. - The name ‘‘predatory lending’’ originates from the wordpredators,which
refers to hunting animals. The implication is that these lenders take advantage
of those who are in great need of a loan by charging them very high origination
fees and by asking them to sign contracts that sometimes allow the lender to
confiscate and foreclose on the property the first time the customers are delin-
quent in making a payment. - Subprime lending was invented by lenders and heavily promoted by the U.S.
Department of Housing and Urban Development, as well as many GSEs. It
Operating an RF Bank in the United States 355