During the great recession banks extended credit and funded home mortgages for people who could not actually afford the payments. This was especially true for those who took adjustable rate mortgages when rates were low and saw their payments skyrocket as rates increased. According to a report by the Federal Reserve, toxic mortgages; financial firms acting recklessly and taking on too much risk; and a mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with concurrent systemic breaches in accountability and ethics at all levels is what caused the housing bubbly that burst in spectacular fashion.

All of this would have been avoided if Islamic banking had been the standard across America.

While Islamic banks service those who wish to preserve Shari’aa law, they welcome all customers regardless of religious beliefs, or lack thereof, and contain many unique features that should be considered by anyone before deciding whether or not to select an Islamic institution for their next loan.

The underlying principles of Islamic banking are fairness and shared responsibility. Traditional banks will lend you money if you’re creditworthy, with little concern about the actual thing in which you intend to invest. A house, for example, can either be a successful or unsuccessful investment, but when it loses value, you still owe the bank the same amount of money you borrowed in the first place, plus interest. Islamic banks, on the other hand, have more stringent rules and won’t help you invest in something they don’t consider affordable or a good investment for either you or them.

This culture of ethical responsibility and willingness to change the banking world for good has been a goal of Dr. Yahia Abdul-Rahman’s for 45 years. Abdul-Rahman is currently the CEO of LARIBA Bank of Whittier, an Islamic-centric financial institution that offers interest-free banking, or as he calls it, RF banking, meaning Riba Finance or responsible finance.

For LARIBA Bank of Whittier, every transaction is an investment that uses the lease-to-purchase model. “We get the address of the house and ask for three live-market document estimates of how much would this house rent for if you were buying it as an investment, and the customer's finance officer does the same,” Abdul-Rahman said. “Then we use a proprietary model to calculate the rate of return on the investment using the rent estimates. If the rate of return on investment is higher than what the shareholders and investors of the house are expecting, then this makes it a very good investment, and we tell our customer that they’ve found a home that makes economic sense and we are going to invest with them and we’re going finance it.”

However, if the financial models show that the borrower is making a bad investment, the bank will tell them that it’s a bad economic decision and it will not invest with them. The strict rules in place and financial models mean that the bank rarely makes bad investments. The idea for the consumer is that they will slowly buy their house from the bank over an agreed-upon period of time at an agreed-upon price without paying any interest. The consumer will also pay rent to the institution for the use of the bank’s share of the property until the consumer has bought all of the Banks portion.

In addition, the bank will not be on your deed for the house, so if a worst-case-scenario happens to the bank, which seems to happen a lot to small banks in America these days, you don’t need to concern yourself or worry about what’s going to happen to the banks' partial ownership of your house. It's still your house and no one can force you to sell it.

The underlying message is that the borrower is in a partnership with the bank, so there are no hidden fees, and the consumer can buy the bank's share of their home at any moment without any penalty fees.

Abdul-Rahman came to the United States from Cairo, Egypt, in 1968 with $17 in his pocket, a fitting start to life in America for someone who likens himself to the protagonist of "It’s a Wonderful Life," which tells the story of a banker with a good heart who always tries to do the right thing for the community. Abdul-Rahman started LARIBA in 1987 but quickly expanded and bought the Bank of Whittier in California in 1998, which was, and remains, a small bank that only has two branches. It has been run with what Abdul-Rahman calls the American RF, which he says allows people to go out and participate in the "American dream" without over-indulging and renting money by paying interest through the abuse of "charge cards" -- credit cards and loans.

This approach has largely worked for Whittier and Lariba and Bank of Whittier. As dozens of small banks failed during the financial crisis, Whittier spotted it early. In 2006, he began advising its underwriters to be extremely cautious and tight in its standards. Islamic bank also offer Islamic bank accounts.

“We look at every demand account or checking account as a trust around our neck," Abdul-Rahman said. "We cannot use it in lending, it’s a trust. That’s why you’ll find 15 to 20 percent of our cash in the Federal Reserve, because these funds are entrusted in our hands by the checking account holders."