A Minnesota jury has ruled that a home financing scheme designed to exploit Muslim buyers violated state law. The verdict, delivered late Thursday, centered on predatory lending practices involving contract-for-deed agreements.
The case, brought by the state attorney general, alleged that the defendants specifically preyed on Somali and other Muslim communities in the Twin Cities. These buyers were often steered away from conventional mortgages, which comply with Islamic religious principles prohibiting interest, into high-cost alternative financing.
According to the verdict, the scheme's operators, including defendant Chadwick Banken, used deceptive terms and inflated prices in these contracts. The jury found that this conduct violated Minnesota's consumer protection and housing laws, marking a significant legal win for the state's efforts to curb predatory lending.
The ruling could have broad implications for how contract-for-deed sales are regulated, especially when targeting vulnerable religious or ethnic groups. Housing advocates say this sets a precedent for holding financiers accountable for discriminatory lending practices.
Defense attorneys had argued that the transactions were legitimate business dealings and that buyers understood the terms. The jury rejected that argument, underscoring the power of anti-discrimination statutes in housing finance.