You are browsing the archive for 2019 December 23.

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A New Secularism Is Appearing in Islam

December 23, 2019 in Economics

By Mustafa Akyol

Mustafa Akyol

For decades, social scientists studying Islam discussed whether this second biggest religion of the world would go through the major transformation that the biggest one, Christianity, went through: secularization. Would Islam also lose its hegemony over public life, to become a mere one among various voices, not the dominant one, in Muslim societies?

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Many Westerners gave a negative answer, thinking Islam is just too rigid and absolutist to secularize. Many Muslims also gave a negative answer, but proudly so: Our true faith would not go down the erroneous path of the godless West.

The rise of Islamism, a highly politicized interpretation of Islam, since the 1970s only seemed to confirm the same view: that “Islam is resistant to secularization,” as Shadi Hamid, a prominent thinker on religion and politics, observed in his 2016 book, Islamic Exceptionalism.

Yet nothing in human history is set in stone. And there are now signs of a new secular wave breeding in the Muslim world.

Some of those signs are captured by Arab Barometer, a research network based at Princeton and the University of Michigan whose opinion surveys map a drift away from Islamism — and even Islam itself. The network’s pollsters recently found that in the last five years, in six pivotal Arab countries, “trust in Islamist parties” and “trust in religious leaders” have declined, as well as attendance in mosques.

Granted, the trend isn’t huge. Arabs who describe themselves as “not religious” were 8 percent of those polled in 2013, and have risen to only 13 percent in 2018. So some experts on the region, like Hisham A. Hellyer, an Egyptian-British scholar, advises caution.

Yet others, like the Lebanese-born popular Middle East commentator Karl Sharro, think there is really something going on. “It is true to a certain extent, and you can feel it in many places including the Gulf,” he said regarding the secular wave. “It’s the beginning of something that will take a long time.”

What is the cause? “It is mainly Islamist politics and some of the social and political manifestations of the Islamic awakening,” Mr. Sharro argued. These include, he said, “disappointment with the Muslim Brotherhood in Egypt, the shock of ISIS, fatigue with sectarian parties in Iraq and Lebanon, anger at the Islamist regime in …read more

Source: OP-EDS

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A Better Way to Bring Lending to the Underserved

December 23, 2019 in Economics

By Diego Zuluaga

Diego Zuluaga

Regulations aimed at increasing low-income Americans’ access to credit are getting a long-overdue revamp. Two of the three agencies responsible for enforcement of the Community Reinvestment Act issued a proposal earlier this month to change the way they assess how banks lend to underserved communities. The proposal is modest, but it includes some important changes to CRA regulations that will focus on lending to low-income households and recognize that banks are increasingly going branchless.

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The CRA, enacted in 1977, applies to banks but not credit unions or fintech lenders. It requires banking regulators — the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Reserve Board — to ensure banks “meet the credit needs” of the communities where they operate, without sacrificing bank safety and soundness. Regulators give banks a rating based on their performance. If banks do not perform well, regulators may block their future expansion and merger.

When the CRA came into being, competition between banks was limited: most states prohibited branching and no states allowed out-of-state banks to enter their markets. The Fed also capped interest on deposits, giving banks cheap access to funds. These barriers to competition have gradually disappeared since the 1980s, ushering in rapid consolidation, a near-doubling of the number of bank offices, and a wider set of banking options for consumers.

At the same time, non-banks such as Quicken and Kabbage have taken up a growing share of the mortgage and small-business lending markets on which the CRA focuses. These non-banks often lend to low-income communities as much as or more than banks.

It has long been time to update CRA regulations to reflect these structural changes to the U.S. banking landscape. Yet the CRA has not undergone meaningful change for nearly 25 years. That’s why the OCC and FDIC reform proposal, without being ambitious, can better address the credit needs of vulnerable households.

For example, under the proposal, loans to high-income borrowers would no longer earn banks CRA points. By counting both loans to low-income borrowers and loans made in low-income areas toward their CRA evaluations, regulators presently reward banks for extending mortgages to prosperous professionals who do not need help from the government. My research shows that, from 2012 to 2017, between 65 and …read more

Source: OP-EDS