Last March, Freddie Mac began investing in non-traditional “mortgages” designed to circumvent the Islamic prohibition on usury, the paying or receiving of interest. In essence, a broker buys the house and sells it to the resident a piece at a time, charging rent instead of interest. Since nothing called “interest” is charged, the contract is judged Islamically legitimate by Muslim clerics.
This arrangement is a pleasant fiction, as the homeowner pays the same amount or more for the money which buys the house as he would if he paid interest. However, this fiction is a positive step for Muslims in America because it represents an accommodation of Islam to reality, to successful life in this world.
Islam, like most religions, is concerned primarily with the afterlife, and justifies itself through faith rather than reason. To succeed and prosper in this life, one must focus on this life and act according to reason rather than blind faith. Muslims in America, for example, must act in ways abhorrent to millions of Muslims around the world–accepting the self-sufficiency of women, accepting the public mixing of the sexes and accepting that freedom of religion extends to blasphemy, for example. To succeed in America, Muslims must value success and prosperity in America over adherence to Islamic custom.
There is a long religious history of the prohibition of usury. Exodus Chapter 22 bans the taking of interest from the poor people of God. Canon law of the Middle Ages forbade the practice to Christians, Martin Luther denounced the practice, while Calvin forbade the taking of interest from the poor. As Europe entered the Enlightenment, however, people chose reality over religion, rewriting, reinterpreting, and quietly discarding the restrictions on usury to the point where they are largely forgotten today in the Christian world.
Many in the Islamic world have called for an Islamic Enlightenment. What the Enlightenment meant was a turning away from religion to the things of this world–to science, commerce, prosperity and happiness. If Muslims begin to place success in this world above obedience to Islamic law, either by ignoring Islamic law or by reinterpreting it, that is excellent news for Muslims and good news for us all.
Freddie Mac press release: http://www.freddiemac.com/news/archives2001/islam.htm
American Finance House LaRiba: http://www.lariba.com/