Bank Offers Sharia Compliant Services

(Ann Arbor, Michigan) Since Sharia Law prohibits paying or receiving interest, the Ann Arbor-based University Bank has formed a subsidiary which allows Muslims to open accounts where any profits are shared rather than paid as interest. In a nutshell, Muslims won't pay home mortgage interest nor be paid interest on savings, they'll "share profits."

From IQNA.ir:

The bank's Islamic deposit accounts allow Muslims to open accounts where any profits are shared rather than paid as interest.

University Bank also offers a mortgage alternative loan transaction program - or MALT - which replaces a traditional home loan with a redeemable lease.

The bank holds the home in trust, and a home buyer makes monthly payments to that trust. Each rent payment includes a set amount of savings, which builds the buyer's equity in the home. When the savings account equals the home's original purchase price, the buyer owns it.

While I'm no accountant, I do know about mortgages and savings accounts and it sure seems like this new Sharia-approved scheme is no more than an exercise in relabeling. Interest on savings is going to be called 'profit' while home mortgage interest will be paid under the name of 'rent.' I welcome readers to provide additional insight. Right now it appears that compliance to Sharia Law in the banking world only requires an English major to fiddle with file names.