In an era of dynamic customer needs and growing societal diversity, the American banking industry is experiencing a seismic shift. Valley National Bank, a prominent financial institution with over 230 branches predominantly in New York and New Jersey, has made an historic leap forward in serving its diverse clientele. In an emphatic show of support for its Jewish customers, Valley National Bank has now joined the fast-growing league of kosher banks certified by the KFI (Kosher Financial Institute), by unanimously voting to adopt a Heter Iska.
This pivotal decision came to light after weeks of detailed discussions between the KFI and Valleyn National Bank’s legal counsel, culminating in a signed resolution from the bank’s Executive Vice President and Corporate Secretary, Gary Micheal. The move sets a new milestone within the Jewish community, particularly for businesses and individuals requiring commercial loans.
Avi Grunwald, CEO of the KFI, highlights the significance of this new development, stating, “My vision is to see kosher banking become the standard across the United States.” His mission is rapidly gathering momentum as a growing number of financial institutions are recognizing the crucial role of faith-based lending services in today’s diverse society.
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13 Responses
If the Heter Iska is “real”, the test is whether the bank will be unable to collect when the borrower goes broke, and the other creditors (unpaid customers and suppliers, tort victims, those who loaned money) get paid first since they are creditors, and the bank gets paid last since they are “partners”. A fake Heter Iska is, if anything, a Hillul ha-Shem.
The KFI’s Heter Iska contracts are all “real” and enforceable. They have already incorporated their Iska with many financial institutions, including significant players such as UWM, currently the largest wholesale lender in the United States. This is fantastic and incredibly encouraging news for the observant community.
This article omitted the single absolute most important piece of information, for why this entire saga has even arisen:- Bank Leumi operations in USA have now merged with Valley National Bank.
Why does a gentile institution need a heter?
KFI is the real deal. They are not looking to give random “kosher” heter iska klali. If you want a signed and documented heter iska, it’s available, and that’s fantastic. Valley National is really doing unusual things in deals I have seen (as a loan broker), and more power to them!
This looks like a great initiative and I wish them much success.
However, I was wondering why this article, seemingly written by KFI, would say that there is a “fast-growing league of kosher banks certified by the KFI (Kosher Financial Institute)” when their website lists only ONE — Valley National.
In total, five other entities are listed on their site as certified, but none appear to be banks, and even if they somehow were, in what sense would these six constitute a “league” — a fast-growing one at that?
Is this “league” so “fast-growing” that the website cannot keep up?
Or is it perhaps possible that the writer, in his/her enthusiasm for encouraging this great mitzvah, might have been somewhat lenient when it comes to geneivas da’as?
Why is this necessary? The only reason for heter iska is if both parties are Jews. We already have a p’sak that any public company is not Jewish until proven otherwise.
Seems like a push for kashrus in an area that doesn’t require it.
I’m all for halacha, but we have learnt, the hard way, the result of unnecessary chumras. Maybe this is why it’s just as asur to add to the Torah as it is to subtract.
Thoughtful response-
Why don’t you stop after your first question? And let people who know the answers respond. The fact the you are unaware why it’s halachicly necessary does not mean that it’s an unnecessary chumra. Ignorance of a problem doesn’t make the solution unnecessary.
Many Poskim disagree with the Psak that you record. And many bank are known to make loans with Jewish money. This is a welcome and necessary milestone, one that will hopefully be followed by many more banks.
Nobody should be in a hurry to call Heter Iska kosher. Sure, it’s commonly done, usually between individuals. However, the GR”A writes about the incredible onshim in Himmel for those who rely on this kula from the MAHAR”M M’Rottenburg. If this bank is owned by Jews, I wouldn’t put my money there.
Were still hoping that one day Goldman Sachs will get a Heter Iska. -their jewish owned
(their savings account , known as Marcus, currently offers the highest interest on the market)
apple card is also backed by Goldman Sacks.
IF we are talking about deposits, if the bank fails and the government doesn’t bail it out (and your account is uninsured), does that mean that as a “partner” with the bank you will only get your money after all the bank’s creditors (depositors and bond holders) get repaid?????
@arizona, you’re clearly ignorant.
The GR”A was speaking about the heter iska of those days of the MAHAR”M (not of Rottenburg, from Krakow). The one we have today is MUCH superior, and especially if they are doing a business expense and they are able to do it as a Kulo Pikadon, it’s far superior to what the the Maharam of Krakow was doing, and the GR”A’s statement has no bearing.
@akuperma, if the heter iska is treated by the government as a loan, even though in beis din it’s a true heter iska, it also has no bearing.
If Beis Din says its a partnership, the government will agree. And partners get paid after creditors. So the Yid ends up saying “ignore Beis Din” – this is all a “lie”. Torah is a lie. I am really a creditor.
When a heter iska gets litigated (typically when one party goes bankrupt, and the United States Trustee steps into the shows of the creditor), they can argue that it is in fact partnership.
More importantly, if the parties are telling the world it is really a loan (meaning the creditor collects first, rather than last), it is a sham transaction clearly designed to avoid the prohibition of ribbis, and thus a Hillul ha-Shem. Yidden who look frum should not be telling the goyim they are doing something against halacha, because they don’t like the requirements of halacha.