Ribit Revisited - A Commercial Conundrum: Does Prudence Permit the Jewish "Permissible Venture?"¹

Prof. Steven H. Resnicoff²
DePaul University College of Law

© 1998 All rights reserved
Prof. Steve H. Resnicoff

TABLE OF CONTENTS

1. INTRODUCTION
2. THE BAN ON INTEREST UNDER JEWISH LAW AND THE USE OF THE PERMISSIBLE VENTURE
   1. SCOPE OF THE JEWISH LAW BAN ON INTEREST
   2. THE INDIVIDUALIZED PERMISSIBLE VENTURE
   3. THE GENERAL PERMISSIBLE VENTURE
   4. DIFFERENCES BETWEEN THE JEWISH "SHUTFUS" AND THE SECULAR PARTNERSHIP
3. TREATMENT OF THE PERMISSIBLE VENTURE AS A SECULAR PARTNERSHIP
   1. THE RISK OF TREATMENT AS A PARTNERSHIP
      1. Partnership Features
      2. Circumstances enhancing the risk
      3. The "wild-card" of judicial review
   2. PITFALLS FROM TREATMENT AS A PARTNERSHIP
      1. Joint and several liability
      2. Federal tax consequences
      3. Proscribed activities
      4. Deposit insurance
      5. Securities laws
      6. Fiduciary responsibilities
4. ANALYTICAL MODELS FOR TREATING THE PERMISSIBLE VENTURE AS A LOAN
   1. POSSIBILITY OF AN ALLOWABLE RELIGIOUS ACCOMMODATION
   2. PERMISSIBLE VENTURE LACKS ESSENTIAL PARTNERSHIP CRITERIA
      1. Partnership criteria
      2. Formal or substantive lack of criteria
         1. General approach
         2. Consumer financing ventures lack criteria
         3. Commercial ventures lack criteria
         4. Objections to disregarding the alleged partnership form
         5. Promotion of public policy
         6. Proposed permissible venture provisions
   3. AN ALTERNATIVE FORM FOR THE PERMISSIBLE VENTURE: THE NON-RECOURSE LOAN
5. POSSIBLE ALTERNATIVE SOLUTIONS TO THE BAN ON INTEREST
6. CONCLUSION