Question:
Hi,
I work as an underwriter for an Israeli fund. The find raises money from Israeli investors, and gives loans with interest to both Jews and non-Jews in the USA.
As the only orthodox Jew in the fund, I have consulted with various rabbonim as to how to deal with the many Ribbis issues that arise in the course of this business. I make sure that a Heter Iska is made for each loan to a Jew.
What concerns me, is that although the owners and borrowers of the fund are aware that there is a heter iska in the loan package,in no way is the being treated as a true partnership, rather as a loan.
On one hand, this is my Parnassah, and I am the only one ensuring there is a proper heter iska, on the other hand, I am bothered by the fact that I am arranging interest loans from jew to jew, even though there is a heter iska, I want to be 100% sure that arranging loans in such a way is upheld by Halacha, and that I may stay at this job with confidence that I am not caught up in the sin or charging Ribbis.
Please let me know your thoughts on this matter.
Thank you.
Answer:
The fact that they treat it as a loan is not really the issue here. What is needed is that the owners should know that the heter iska is legally binding. Meaning that if there would be an instance that the borrower would not have to pay because of the heter iska, that they would honor it, because it is binding. This is what is needed. In truth they have absolutely nothing to worry about because the heter iska is made in a way that they cannot lose from it, and all the banks nowadays have a heter iska. Never the less they have to agree on this point that it is legally binding for them. If they agree to this, then the heter iska is halachically acceptable, as is done in the banks in Israel and mortgages given in Israel to religious people.
Another very important point in lending money with heter iska is that the heter iska has no validity if the person borrowing the money has no profit producing business. If the loan is not taken for a business venture, but for private use, and the borrower does not have any other profit-making venues that have a probable profit generating rate in the amount of the interest, then the heter iska is not valid since he cannot pay dividends to the loan company from a partnership, since there is nothing for them to become partners in.
Correct. The poskim however say that if he has real estate that the increased value of the property can be made into a heter iska. See Shut Tshuras Shai 1-23, Bris Pinchos 20-7, 8.
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