Recently it was reported in the state of Minnesota that Somali Muslims were successful in getting the Minnesota Housing Finance Agency to agree to a program that would allow Minnesota Muslims to purchase homes with zero percent mortgages. The reasoning offered by Muslim leaders to Minnesota authorities as to the need for such a home buying program was that Shari’a (Islamic) law prohibited Muslims from paying interest to buy homes, cars or any item that could be potentially financed. But is this premise true? Does Shari’a law prescribe Muslims to reject the payment of interest?
Shari’a law is the Islamic law dictated by the Qur’an and the teachings of Muhammed, Muslim leaders insist. But there are only five verses in the entire Qur’an that refer to teachings on interest and all five use the term “usury” which is the charging of excess or exhorbitant interest. None of the verses say anything about the followers of Islam being forbidden to pay interest, only that they are not to charge excessive interest (i.e. usury) in their dealings with each other.
Muslims can, however, charge excess interest when dealing with non-Muslims, as condoned by the teachings of the Qur’an. This is known in Muslim circles as the infidel tax or poor-rate tax or jizyah.
Two verses in the Qur’an make it clear that the issue of interest has to do with Muslims charging interest, not paying interest. Surah (chapter) 2:276 says that, “Allah does not bless usury [or usurious gains]. . . .” Among Muslims it is not objectionable to earn excess interest, only to charge it.
In surah 4:161, is another clear verse on usury. It states: “And their taking of usury though indeed they are forbidden it and their devouring the property of people falsely. . . .” In this verse it is clear: usury, the practice of taking advantage of someone by stealing their property through the excessive charging of interest is forbidden. Surah 3:130 reasserts this standard with, “Do not gorge yourselves on usury, doubling and re-doubling it.”
This is not a unique concept and predates Islam by thousands of years in the recorded history of the Jews. The concept and “law” of charging “no interest” comes from the Bible, not the Qur’an. In Exodus 22:25, Moses laid down God’s law for the Jews in dealing with the poor. “If you lend money to one of my people among you who is needy,” Moses quoted God’s instructions, “do not be like a moneylender; charge him no interest.” In other parts of the Torah (which Muhammed charged his followers to adhere to), Moses further stipulates that the Jews are not to take advantage of the poor by charging interest for loaning them money or other necessities.
So, Muslims can pay interest, just not charge their fellow Muslims excess interest. But since no bank run by Muslims or non-Muslims can afford to loan money at 0% and stay afloat, how could any bank or finance agency offer such a program? They can’t. So, here’s the shell game that’s played. The lending institution charges “no interest” on paper but inflates the purchase price of the home or car to cover the interest that would be earned if interest was charged. The inflated purchase price is then divided by the number of scheduled payments to derive at the monthly payment.
An example of how the slight-of-hand works would go like this: A Muslim wants to buy a $25,000 car. He can put $5,000 cash down but wants the rest at 0% for 5 years. The seller calculates the going interest rate (of, say, 6%) and determines that at 6% over 60 months the $20,000 would yield $3,200 in interest. So, the sale price of the car now jumps to $28,200 ($25,000 + $3,200) with payments of $386.66/month. No interest is officially charged, but the seller gets the same return on his loan.
Now, the question for the ACLU and the rest of America is: If we allow Muslims to dictate terms of doing business in America that they say is required by their Shari’a law, why not Christians and Jews according to their biblical law? How about we just scrap the Constitution and let everyone follow the “law” they feel called to adhere to?
Perhaps Australia has the right approach. A couple of years ago, out of frustration of dealing with Muslims in Australia, a number of Australian leaders voiced the opinion that Muslims, as well as all Australians, were to follow Australian law and it only. If Muslims wanted to follow Shari’a law they were welcome to leave the country and seek to live in a Muslim country that permitted it.