In an unprecedented milestone, Dime Community Bank has become the latest in a rapidly growing list of kosher-certified banks in the United States. This significant leap forward was achieved following extensive discussions between the bank’s executive and legal teams, along with the KFI, culminating in the successful implementation of a kosher Heter Iska.
This remarkable transformation aligns Dime Community Bank with other financial institutions such as Arbor Financial Group, PML, and Valley National Bank, all of which have adopted a Heter Iska within the past month alone. This trend contributes significantly to the expanding list of banks and mortgage companies offering kosher-compliant services.
The Heter Iska adoption by Dime Community Bank underscores a powerful evolution within the banking industry. The alignment of financial services with religious values ushers in a new era in U.S. banking, setting a compelling precedent for institutions nationwide and lighting the way for adopting a Heter Iska.
Each new addition of a kosher bank or mortgage company offers the Observant Jewish community greater access to financial institutions that not only meet their financial needs but also align with Jewish religious requirements. This ongoing shift in the industry highlights a significant change in banking practices and a renewed commitment to meeting the needs of the growing Jewish population.
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6 Responses
These are gentile banks. Why is the heter even needed? Frum Yidden have been using these banks, and other banks, without a heter.
But of course interest rates are so high , who can afford to borrow $$$
Wow, this is truly remarkable news for K’lal Yisrael! I have avoided them in the past due to the presence of prominent Jewish beneficial owners on their board of directors.
Thank you for sharing this.
If the bank fails (often happens, especially for a local bank that is not “too big to fail”), would the FDIC (which insures deposits and acts as receiver of the failed bank) consider loans made to the bank (i.e. deposits) to be covered by federal deposit guarantees since by definition if they are covered by the Heter Iska, they are not loans.
Similarly, if a person to whom the bank loans money goes bankrupt, would the bankruptcy trustee attempt to enforce the heter iska by arguing that the “loan” from the bank was an equity relationship, and only gets repaid after other creditors.
One needs to remember that when push comes to shove, it will be a non-Jewish court (probably either the New York Supreme Court, the United States District Court, or Bankruptcy Court, that is doing the enforcing – even if the Heter Iska specifies a Beis Din).
@akuperma
First, it’s interesting to note that your assumption that a “Heter Iska” isn’t considered a “loan” isn’t necessarily accurate. Take a look at the OCC Interpretive Letter #806.
I’m unsure if you’ve reviewed any of the KFI’s Heter Iskas. I have, and they appear to be far more advanced than the common Heter Iska. There’s a clause that allows the Iska to convert into a loan if the note is transferred to a non-Jewish institution.
P.S. KFI has republished “The Hetter Iska and American Courts” by Rabbi Dr. Bleich, which I found highly educational.
But if the “Heter Iska” is a de facto loan, then why doesn’t that undermine the “heter”?
The policy idea behind the halacha is that a loan should be interest free, and be a form of charity, and business deals should involve the one supplying the capital to “have skin in the game”.