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Last Tuesday, the League provided testimony in favor of LD 1277, a bill which would allow credit unions to temporarily own property for the purpose of creating interest-free lending products that comply with Sharia law. The bill is currently being considered by the Health Coverage, Insurance and Financial Services Committee.
With immigration, Maine has seen growth in its Muslim population. Some religious practices within the Muslim community forbid the payment of interest, or riba. With traditional models of banking, this leaves many without access to the capital needed to buy homes, expand businesses, or even hold savings accounts.
Jennifer Hogan, CEO at Community CU, testified that she has been working on identifying a banking solution for five years and is eager to see it move across the finish line. Temporarily allowing credit unions to own property would enable the creation of loan products like interest-free installment loans or partnerships with community-based, Sharia law compliant LLCs.
The restriction against property ownership only exists for credit unions. Banks can choose to offer these types of products already, however many do not. This bill would provide parity and allow our state-chartered credit unions to compete with banks and serve their communities.
Our communities in Maine have changed and we must change with them to meet the needs of our neighbors. The League is proud of the work our credit unions have done and will continue to do to ensure all Mainers have somewhere to call home.