company/bank. It helps the customer make the decision to buy a prop-
erty—or not to buy it, and instead rent until it becomes more economi-
cally sound to buy it.
5.It normalizes the monetary problem of paper (fiat) money by marking
the property to the market, as called for by the mark-to-market rule,
and by relying on pricing the property in terms of a reference commod-
ity, as called for by the commodity indexation rule. Using this approach
helps us to identify economic bubbles before they fester and become
speculative bubbles. In this way, we avoid participating in such a bub-
ble. We detected the real estate bubble in many states in the United
States as early as 2005 and 2006. This raised a red flag that stressed to
our underwriters the necessity of exercising diligent caution when eval-
uating the ‘‘investment’’ based on the mark-to-market rule and the
commodity indexation rule.
6.It benefits the customer and the financing entity, because its method is
based on investing in a property or a business and not on renting
money. It reveals the economic value of the purchased property which
insures prudence in investing and protects against participation in an
economic bubble.
7.It relies on arbitration using experts who are well versed in Shari’aa that
are chosen by each side.
8.It uses the standard financing documents and notes. This makes it fulfill
the U.S. banking regulations, meets the requirements of bank exam-
iners, and makes it seamless in case other government requirements are
implemented. This also helps the consumer and the financing entity set-
tle any dispute before U.S. courts without confusion or mis-
interpretation that may cost a lot of time, money, and frustration.
Using the standard finance document and notes allows the customer to
declare its finances in an understandable and U.S. government–compli-
ant way that benefits the customer in preparing and reporting their
taxes and in reporting and complying with government agencies like
the Labor Department, pensions, and/or retirement plans.
9.It records the title of the property in the name of the customer directly.
The model does not call for the title to be recorded in both the customer
and the company’s name, as is required in some Shari’aa-compliant
schemes. Doing it this way may expose the customer to the unknown
liabilities and unknown corporate future of the financing entity/bank,
and it limits the freedom of choice of the customer.
10.It services the financing facility (servicing means billing, collection of
monthly payments, escrowing ofinsurance and tax payments, and
resolving any problems) and it does not sell servicing to an outside ser-
vicing company. The Shari’aa-based model requires that the RF finance
RF Banking Model for the 21st Century 275