followed the laws of the land and the norms required by the U.S. banking
regulations—something we later discovered that he knew very little, if any-
thing, about. He asked us to supply him with copies of the standard deed of
trust and promissory note used in standard banking transactions. After a
few weeks, he e-mailed us his products. Upon investigation, and after
matching the Microsoft Word documents using the edit-tracking facility,
we can summarize what he did as follows:
1.Replaced the wordinterestwithrentorprofit. We had told him that we
take care of that in the process of finance preparation, and that doing it
this way creates a completely different set of documents that will re-
quire us to obtain an exception to receive detailed approvals from the
regulators, which would expose us to a lengthy and expensive process.
We also stated that this approach might compromise the interests of the
customer, especially in a court of law where it would result in utter con-
fusion among the judge, the prosecutors, the defense attorneys, and the
jury. We also stated that it does not matter—based on many references
in Shari’aa—what you call that percentage as long as it does not imply
the ‘‘renting’’ of money, indicating a riba-based transaction.
2.Made the process look like a buy/sell agreement. We told him that in
a buy/sell transaction—based on the laws of the land and Shari’aa—
we should include a documented and properly recorded transfer of
title from the seller to the bank (the buyer), which violates U.S. bank
regulations and credit policy, and subsequently from the bank to the
ultimate buyer. In addition, this claimed buy/sell step is, in reality,
synthetic, because we know that the bank never intended to buy the
property and that the process is done this way to make it look Is-
lamic. We told him that metaphorically, it reminded us of a man who
wanted to enjoy a few nights with a lady. He proceeded to marry
her with the intention of divorcing her after he got his pleasure—
definitely a deceptive trick designed to make the process look reli-
giously acceptable on paper, though the intention was anything but!
We also told him, based on our long-time banking experience, that
this approach might open the bank (as a buyer of the property) to
punitive actions by the regulators and a potential capital gains tax
that could be significant. He said, to our amazement, that changing
title was not necessary, because at the time of Prophet Muhammad
(pp), there was no change of title! We told him that we obviously
were no longer living in that age. We also told him that it would be
counter to our claims to be trying to uphold Shari’aa if we did not tell
the truth, which is one of the most important foundations of any
faith, let alone the Judeo-Christian-Islamic value system.RF Banking Model for the 21st Century 253