This article has been written by guest author Todd Williams, B.A. Bowdoin College, 2004; M.A., J.D., University of Washington, 2010.
The field of Islamic finance has grown popular in the United States. Scholars are discussing the implementation of Islamic banking as a result of, among other things, the meltdown of the Western financial system and studies showing a large untapped market of stable wealth among Muslims.[1] The use of Islamic banking products in the United States is certain to expand in coming years.
Amid this enthusiasm, there are questions, among scholars and in Muslim communities, about whether products created within the confines of United States financial regulations that are marketed as “Islamic” are indeed in conformance with Shari’a, or Islamic law.[2] This disagreement is due, in part, to a lack of consensus among Islamic legal scholars regarding what is required for a modern financial product to be Shari’a-compliant.[3] This lack of consensus hints at the disjointed American terrain of Islamic authority, which presents novel challenges to Islamic institutions, both financial and otherwise, in the United States.
Muslim Authority Structures in the United States
In the United States, where Muslims are a growing and increasingly diverse minority in a nominally Christian nation, the potential for lack of consensus among Islamic scholars is great. Partially due to the diversity of ethnic and cultural backgrounds, the American landscape of Islamic legal authority lacks cohesive definition and is open to new interpretation. Khaled Abou El Fadl, the chair of Islamic Law at UCLA, has noted, “[i]n the United States the field of Shari’a is flooded with self-declared experts who inundate our discourses with self-indulgent babble and gibberish.”[4] These new voices in Islamic law have both mainstreamed the discourse and led to a simplification that lacks the traditional commitment to diverse interpretations.[5]
Despite their general lack of formal Islamic legal education, these new participants are shaping the future of Islamic law in America. They are delivering opinions on modern American issues at the request of their constituents. This practice is supported by leading intellecuals such as El Fadl and Taha Alalwani who discourage the application of Islamic legal decisions rendered elsewhere to the modern American context. Instead they advocate fiqh[6] scholarship in the United States that is shaped by the contemporary American context and rendered by American scholars.[7] With the growth of an ethnically and culturally diverse community, the concept of an “imported” scholar who does not understand local conditions and circumstances has become problematic.[8] Increasingly, the American Muslim community has turned to local experts, familiar with the community and the American legal system, for solutions to their fiqh-related issues.
The lack of connection to traditional methods of Islamic legal interpretation among local authority figures has led to a discourse in the United States that some say lacks respect for the classical schools of thought and principles of pluralism.[9] Western-educated Imams “often earn instant popularity because of reference to the ‘sources,’ but, since their interpretations do not form a continuity with tradition, their impact is often partial and ephemeral.”[10] In order to stay relevant, these new intellectuals are frequently obliged to render dramatic and extremist solutions, further deviating from any consensus view.
Implications for Islamic Institutions in the United States
As a result of these various perspectives and the absence of clear hierarchy among Islamic legal scholars in the United States, questions regarding the acceptability of certain practices have resulted in disagreements. In the context of this uncertainty, and the complex process of determining Shari’a-compliance, Muslims seeking guidance are likely to place more importance on the authority figure endorsing a given practice.[11]
For Islamic financial institutions, this presents potential challenges as they search for a religious advisor who will provide sufficient authority. The backing of a prominent scholar provides consumers with the security that the products they are using are indeed compliant with Shari’a.[12] Many of the larger banks and mortgage companies that offer Shari’a-compliant products employ reputed Islamic scholars as consultants and certifiers for their products.[13] For small institutions without significant capital resources, paying for a well-known scholar to advise them is out of the question. Accordingly, they must seek alternative means of projecting credibility.
As one planned Islamic credit union in Washington State found, it is essential to employ some religious advisor, even a local leader, who has credibility among the target population.[14] This advisor can either provide guidance himself on structuring products or can access a line of scholars who provide guidance. For executives, determining what qualifications are required before a critical mass of Muslims will deem an authority figure to be credible is a tricky problem. Selecting such an advisor may be an increasingly critical prerequisite to the success of an Islamic institution in an environment that is fraught with uncertainty.
As Islamic finance continues to grow in the United States, the trajectory of local Islamic financial institutions will be shaped by the religious scholars who come to define them, often with their own brand of uniquely American Islamic law. In the current atmosphere of uncertain authority, it is likely that local institutions will take on various structures, each of which will reflect the ideas of their authority figures. While this offers potential for actualizing the ideas of Muslims around the country, it may mean that disagreements regarding what qualifies as Shari’a-compliant continue for the foreseeable future.
[1]. Chian Wu, Islamic Banking: Signs of Sustainable Growth, 16 Minn. J. Int’l L. 233, 240–241 (2007).
[2]. See, e.g., Bill Maurer, Engineering an Islamic Future: Speculations on Islamic Financial Alternatives, 17 Anthropology Today 8, 8 (2001) (discussing the heated debate among Islamic banking professionals about the permissibility of financial derivatives).
[3]. Bill Maurer, Pious Property: Islamic Mortgages in the United States 42 (Russell Sage Foundation 2006); Ibrahim Warde, Islamic Finance in the Global Economy 2 (Edinburgh Univ. Press, 2000); Frank Vogel & Samuel Hayes, III, Islamic Law and Finance: Religion, Risk, and Return 42, 10 (Dr. Mark S. W. Hoyle ed., 1998); Ashraf U. Kazi & Dr. Abdel K. Halabi, The Influence of Quran and Islamic Financial Transactions and Banking, 20 Arab L. Q. 321, 328–29 (2006).
[4]. Maurer, Pious Property, supra note 3, at 53.
[5]. Karen Isaksen Leonard, Muslims in the United States: The State of Research 91 (Russell Sage Foundation 2003).
[6]. Fiqh is Islamic jurisprudence and refers to the legal rulings of the Muslim scholars based on their knowledge of the Shari’a. Karen Armstrong, Islam 200 (Modern Library 2000).
[7]. Leonard, supra note 5, at 91.
[8]. Yusuf Talal DeLorenzo, The Fiqh Councilor in North America, in Muslims on the Americanization Path? 80 (Yvonne Yazbeck Haddad & John L. Esposito eds., 1998).
[9]. Leonard, supra note 5, at 91.
[10]. Muhammad Khalid Masud, The Obligation to Migrate: The Doctrine of Hijara in Islamic Law, in Muslim Travelers: Pilgrimage, Migration, and the Religious Imagination 46 (Dale F. Eickelman & James P. Piscatori eds., 1990); Leonard, supra note 38, at 91.
[11]. Maurer, Pious Property, supra note 3, at 3.
[12]. Maurer, Pious Property, supra note 3, at 83.
[13]. Vogel & Hayes, supra note 3, at 10.
[14]. Todd Williams, Islamic Legal Authority in a Non-Muslim Society: The Islamic Credit Union of Bellevue, Washington 15-25 (August 16, 2010). Available at SSRN: http://ssrn.com/abstract=1660210.