We mentioned that most banks in Eretz Yisrael have an existing heter iska, which can often be seen hanging on the wall of the bank’s waiting room. However, that’s where the documentation ends. It is not documented in the customer’s account or loan file that these transactions are subject to the heter iska. As one posek put it, when we take a mortgage, we sign on dozens and dozens of documents covering every remote possibility and delineating every aspect of the mortgage, yet we do not sign on or even mention the heter iska at all.
This leaves the bank in a position to theoretically be able to deny the validity and restrictions of the heter iska in regard to a specific loan. It’s unclear if the courts will accept the fact that the bank has a heter iska hanging on the wall to nullify what is clearly written in the contract and signed by the client. And as we have learned, the heter iska is meant to be a fully binding legal contract, changing the very nature of the loan into an investment. If it can be legally ignored, then it accomplishes nothing.
Therefore, many leading poskim say that one should ideally request from the bank that it attach a heter iska to their customer’s file, thus assuring that all activities in the account are subject to it. This can be done even after opening an account. Once a heter iska is attached to the file it can no longer be ignored, and therefore it accomplishes all that it is meant to do.
Likewise, when taking a mortgage, before signing one should ask for a signature from the bank confirming that this mortgage is subject to a heter iska. They will usually write on the cover page “subject to heter iska” and sign underneath. The banks are familiar with this request and will usually agree to it without making a fuss.
Following the steps above can ensure that one’s financial dealings with the bank are ribbis free. Chazal have taught us that transgressing the prohibition of ribbis can ruin a person financially, and many people have experienced this firsthand. On the positive end, exercising vigilance to protect oneself from ribbis is an effective way to ensure success in business.
