CAIR-CHICAGO: HOW BANKS MAKE ISLAMIC ‘NO INTEREST’ RULE WORK
Islamic home lending is a thriving business at the few U.S. banks offering Shariah-compliant, no-interest financing.
Meanwhile, the big banks are still hanging back, wary of the high costs of entry.
As word gets out to Muslim customers and more banks work out the regulatory kinks, the market is getting smoother and more profitable, according to those involved.
Two years ago, only three banks offered Islamic financial services: Devon Bank in Chicago, University Bank in Ann Arbor, Mich., and HSBC in New York. The two community banks are still in the business, but HSBC dropped out of the market in December. A company statement said volumes “were not large enough to warrant continuation of the product at this time.”
“Large institutions aren’t moving into the market in the United States as much as they have been abroad,” said Shirley Chiu, an economist at the Federal Reserve Bank of Chicago.
Meanwhile, Broadway Bank in Chicago and United Trust Bank in Bridgeview, a West suburb, have both started offering Islamic finance products. . .
There are about 400,000 Muslims in the Chicago area, according to the Chicago chapter of the Council on American-Islamic Relations.