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Monday, November 3, 2008

Dream fulfilled helps Muslims realize theirs (2)

George Bailey's lesson

Abdul-Rahman, an imam — or Muslim scholar — likens himself to the small-town banker with a good heart played by actor Jimmy Stewart in It's a Wonderful Life. He screens an edited version of the movie for new employees and often retells the hallowed Hollywood tale of how townsfolk who invested small savings together created a better life for all.

Since Lariba's founding in 1987, in a room with a broken window over Abdul-Rahman's garage, the state-regulated finance company has underwritten more than $200 million in automobile, business and mortgage loans. It originated nearly half that total in 2003, the most recent year for which Federal Reserve data are available.

In turn, secondary-mortgage marketers Fannie Mae and Freddie Mac purchase the mortgages from Lariba for their portfolios, recycling cash back into the business.

Last year, Abdul-Rahman took the helm of a small national bank, the Bank of Whittier, with $26 million in assets, as a vehicle to expand into 49 states. Clients who require more funds or more competitive terms than Lariba can provide are referred to the bank. Competitors:

• Guidance Financial Group in Reston, Va., a sharia-compliant mortgage finance company founded by French-Syrian economist Mohamad Hammour. It is building a nationwide retail presence, supported by funding from secondary-mortgage marketer Freddie Mac.

Guidance Senior Vice President Rehan Dawer likens the swift development of Muslim mortgage products in this country to the advent of bottled water: initially expensive, eventually indispensable.

• Devon Bank in Chicago, a Jewish family-owned bank, launched Muslim real estate and business-loan products in January 2003 in one of the country's most diverse neighborhoods. It joined a handful of traditional financial institutions, including HSBC in New York and University Bank in Michigan, in exploring the Muslim market.

Bank attorney David Loundy, a son of Devon's founder, says he solicited approvals from federal banking regulators and the Sharia Supervisory Board of America for the bank's Muslim mortgages, which now account for half of its small but fast-growing mortgage portfolio. He also developed savings accounts that replace interest income with profit sharing. The deposit accounts await Securities and Exchange Commission approval.

• Several Muslim-Americans, including principals of Samad Group in Kettering, Ohio, and Shape Financial in Falls Church, Va., are developing other sharia-compliant financial products.

Abdul-Rahman, the son of a former Egyptian undersecretary of education, came to the USA as a chemical engineering graduate student at the University of Wisconsin in February 1968. He had $17 in his pocket and no scholarship. With a job as a teaching assistant, he earned master's and Ph.D. degrees.

He was destined for good fortune. Upon graduation, Abdul-Rahman joined oil company Atlantic Richfield, later Arco, in Texas, and earned several patents for his work extracting oil from shale.

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