SUMMARY OF FEDERAL BANKING REGULATIONS IN THE UNITED STATES

The following pages summarize some of the important U.S. banking regulations. These regulations are intended to make sure that the financial system in the United States is well regulated and streamlined to prevent any excesses or mismanagement. All these add to the worldwide credibility of the U.S. dollar as a reserve currency of the world. Regulators' main objective is to make sure that the banks' financial services are performed in a universal and standardized regulatory fashion to regulate the banking business in the states of the United States, which in fact resemble 50 different nations. These regulations are improved on a continual basis in the United States, as we have seen, in response to unfortunate experiences of excesses and malpractice. The regulations are built on a vast body of human experience over the years since the dawn of history. As we read in the Qur'aan about justice, discrimination, and fair dealing among people:

55:9 weigh, therefore, [your deeds] with equity, and cut not the measure short!

10:47 NOW every community has had an apostle; and only after their apostle has appeared [and delivered his message] is judgment passed on them, in all equity; and never are they wronged.

11:85 Hence, О my people, [always] give full measure and weight, with equity, and do not deprive people of what is rightfully theirs, and do not act wickedly on earth by spreading corruption.

16:90 BEHOLD, God enjoins Justice, and the doing of good, and generosity towards [one's] fellow-men; and He forbids all that is shameful and all that runs counter to reason, as well as envy; [and] He exhorts you [repeatedly] so that you might bear [all this] in mind.

42:42 blame attaches but to those who oppress [other] people and behave outrageously on earth, offending against all right: for them there is grievous suffering in store!

One of the purposes of including some of the important U.S. banking regulations in this book is to introduce the respected readers of this book who may be government officials in many of the developing countries. These regulations should also benefit RF (Islamic) banking and finance scholars, executives, and practitioners. It is hoped that they will be motivated to study these regulations carefully and learn from them. If we want to develop a specialized set of regulations for an RF banking and finance system, we will not have to start from scratch. Some of these regulations are also included to draw the attention of the eminent scholars to the fact that it is definitely not enough to “devise a financing model” and issue a fatwa (an edict) pronouncing that the RF model used by a certain bank is Shari'aa compliant. Many more aspects of the real spirit of the RF system are based on Judeo-Christian-Islamic values, many of which are catered to by these regulations.

• [1] Banking regulations are labeled by an alphabetical letter, starting from A to Z and then AA to, say, CC. For a detailed listing and description of these regulations, please visit the U.S. Treasury Department website.