The purpose of this Article is to explore, and explain the stubborn persistence of, a central paradox that is endemic to the retail Islamic bank as it operates in the United States. The paradox is that retail Islamic banking in the United States is impossible, and yet it remains highly desired. It is impossible because central features of modern banking regulation conflict with fundamental aspects of shari’a as it is understood in modernity in the context of finance. It is unimaginable that regulators will create exceptions to, or somehow significantly amend, the modern financial regulatory system in the radical fashion necessary to accommodate Islamic finance. Yet notwithstanding such impossibility, Islamic banking is also highly desired in that there is a preoccupation with finding a way to enhance the very limited Islamic commercial banking opportunities that exist in the United States.
The paradox endures because the Islamic bank, and the accommodation of it within the U.S. regulatory sphere, is a powerful symbol for the accommodation of the broader, pious Muslim public. The pious Muslim eager to see an Islamic bank open in her neighborhood is at best only partly interested in adherence to religious doctrine. The Islamic bank is more importantly a reflection of a broader recognition of her space in the American fabric.