heter iska loan By resolution of the Board of Directors (“Board”) of Cross River Bank, 2115 Linwood Avenue, Fort Lee, New Jersey 07024, Cross River Bank, on behalf of its subsidiaries (“Investment Partner” or the “Bank”), hereby confirms under this General Iska Agreement (“General Iska Agreement”)
on behalf of its Jewish shareholders that any transaction or arrangement involving the Investment Partner (including, but not limited to, transactions with persons or entities lending money to the Bank or its agents, or with persons or entities receiving money from the Bank or its agents in any form of loan or deposit,
including debts, guarantees, mortgages, savings accounts, stock issues, stock transactions of any kind, any activity or remuneration from brokerage or trust business) that violates the Jewish Usury Laws (hereinafter referred to as “Ribbis”) shall be deemed an “Iska” partnership and shall be subject to the following terms.
Capitalized terms not defined herein have the meaning as defined in Jewish law
In exchange for advances or funds provided to the contracting parties in a manner that violates ribbis (Jewish legal principles), such a transaction is structured as an isk.
The funds so provided are used by the managing partner (hereinafter referred to as the “managing partner”) for business investments.
The managing partner invests the funds in the acquisition of or investment in real estate, goods or other assets that it deems profitable. All profits and losses are divided equally between the investing partner and the managing partner.
If Jewish law requires an isk to be structured as a “kulo pikadon,” all profits and losses from the isk are considered the exclusive property of the investing partner. The managing partner must substantiate any loss claims with the testimony of two halakhically recognized witnesses before an Orthodox Jewish court.
All statements regarding the amount of profit generated by the joint venture must be confirmed by a solemn oath before an Orthodox Jewish court.
n addition, the Investing Partner may demand unrestricted access to all legal documents, financial statements and supporting evidence that it deems necessary to verify the Managing Partner’s statements.
In the event of a transaction in which the Managing Partner does not profitably invest the funds received from the Investor, it will allocate to the Investor a share of its remaining investments equal to the value of the transferred funds as an Iska Partnership.
In the event of a claim for damages or loss of profits
(i) the Managing Partner shall notify the Investor in writing (a “Notice”)
within thirty days of the end of the month in which the damage or loss of profits occurred; and (ii) the Investor may demand full and immediate payment of the remaining Iska balance.
The General Partner has full authority to manage this investment and operate the Iska Partnership in the manner most beneficial to the Investor. The General Partner will receive a management fee of one dollar for its services during the term of the Iska Agreement.
The Investor’s share will be reduced by the amount of this management fee, which shall be paid to the General Partner for its services during the term of the Partnership, regardless of any profits. The Investment Partner is not liable for losses in excess of the amount invested.
It is agreed that the Investor waives its right to audit the performance of the Investment if the General Partner makes a payment equal to the principal amount, fees, points, penalties, interest and all other payments specified in an agreement signed by both parties or other document,
according to the payment schedule in such agreement or document, as payment for its share of the profits. However, future payments made to avoid such audit will remain valid in accordance with the respective Transaction Documents.
Any additional profits will belong entirely to the General Partner. These payments include the aforementioned management fee. It is agreed that the Investing Partner waives its right to review the performance of the investment if the General Partner makes a payment equivalent to the principal amount, fees, points, penalties, interest and all other payments specified in an agreement signed by both parties or in another document,
in accordance with the payment schedule in such agreement or document. If the General Partner fails to comply with its reporting obligations as set out below, it cannot claim any loss or loss of profit for that period. In such case, the investment with the funds described above will continue to be considered profitable, and these funds will continue to be invested by the General Partner.
If (i) the General Partner fails to make the monthly payments set forth in the relevant Transaction Documents, or (ii) a default interest clause or other provision applies, the investment of the funds described above will be deemed to be profitable at the interest rate set forth in the Transaction Documents, and such funds will continue to be invested by the General Partner.
Payments not eligible under this General Iska Agreement
will reduce the principal amount of this Iska. Furthermore, future payments will be increased accordingly to compensate for any discrepancies and to ensure that all future payments are in accordance with the relevant Transaction Document.
The Bank may obtain funds from parties not subject to the Ribbis Act by sale or transfer of the Transaction Documents or any part thereof.
Provided that no loss on the loan (Iska) has occurred prior to the aforementioned sale and that the Company does not repurchase the loan at a later date,
the funds will be deemed to have been received for the benefit of the General Partner. Accordingly, the Loan shall be deemed to have been repaid by the General Partner, and this General Iska Agreement shall terminate thereafter. The General Partner shall remain liable to the Purchaser or Transferee in accordance with the terms set forth in the Transaction Documents,
including the obligation to pay all amounts due under such Transaction Documents. This General Iska Agreement shall apply to all applicable Transaction Documents in which the undersigned is involved, r
egardless of whether reference is made to this General Iska Agreement. The use of the terms “loan” or “interest” in applicable Transaction Documents in which the undersigned is involved shall not be construed as an unconditional payment of interest,
but rather as a loan payment in accordance with the terms of this General Iska Agreement
In the event of a conflict between the provisions of this General
Iska Agreement and the provisions of any other agreement executed by the undersigned relating to the subject matter of this Agreement, the provisions of this General Iska Agreement shall prevail.
This General Iska Agreement is enforceable only before a Beis Din (as defined below) and is (a) not enforceable in any federal, state or other local court in the United States or (b) admissible in evidence outside of a Beis Din.
Any dispute between the parties arising out of this document shall be resolved by the Rabbinical Court of Eitz Chaim of the Business Halacha Institute, 1937 Ocean Ave, Brooklyn, NY 11230, or such other Beis Din of similar establishment as may be selected by the Bank (“Beis Din”).
The foregoing resolution of the Board of Directors of the Bank is legally binding by virtue of its authority on behalf of the shareholders.
It is as binding as any other provision of the Bank. No manager or treasurer, now or in the future, is authorized to grant or extend credit, bind the Bank or enter into any obligation that is or may be contrary to the Ribbis or Avak Ribbis.
The Board of Directors of the Bank hereby affirms the legal validity of this General Iska Agreement. The Board of Directors of the Bank hereby authorizes all persons signing documents on behalf of the Bank to sign and register a specific Iska (transaction agreement) based on this agreement at the request of a client.
It is expressly agreed that a transaction
shall be considered an Iska in accordance with this agreement even if the executing partner or the Bank, for any reason, is not aware of this Heter Iska or is not familiar with the concept of Heter Iska.
This is because the Bank, in accordance with the aforementioned resolution, does not conduct any financial transactions that are incompatible with the Torah and rabbinical regulations, and everyone who does business with the Bank acts in accordance with the Bank’s rules,
which prescribe compliance with this Heter Iska. From the date of the Bank’s signature of this document, all transactions will be conducted exclusively in accordance with the provisions of this general Iska agreement.
This General Iska Agreement has been legally valid and signed with proper kinyan (signature), which constitutes a halachic, legal transfer and not an “Asmachta” (illegible transfer).
The following signature, authorized by the Board of Directors of the Bank, serves to confirm and ratify this General Iska Agreement on May 28, 2025. Click hare….