New York Democrats are again advancing legislation that would require state agencies to create an investment instrument designed to comply with the Islamic prohibition on interest, reviving a proposal that has already passed the state Senate three times.
Senate Bill S3901, introduced by Brooklyn Democrat Kevin Parker, directs five state entities to develop what it calls an “Alternative Finance Investment Bond.” Parker’s sponsor memo identifies the proposed instrument as a form of sukuk, an Islamic financial product that generates returns through assets rather than conventional interest payments.
EXCLUSIVE: New York Democrats are trying to create a Sharia-compliant state bond—and explore letting cities issue their own.
S3901 would force five state bodies to build a sukuk, an Islamic financial instrument designed to generate returns without paying interest. pic.twitter.com/xfQtBN70Zg
— Natalie Winters (@nataliegwinters) September 3, 2026
“New York Democrats are trying to create a Sharia-compliant state bond—and explore letting cities issue their own,” White House correspondent Natalie Winters reported. She said the bill “would force five state bodies to build a sukuk, an Islamic financial instrument designed to generate returns without paying interest.”
The legislation directs the Urban Development Corporation, Dormitory Authority, state budget director, superintendent of Financial Services and commissioner of Taxation and Finance to create the instrument within one calendar year. It also instructs officials to consider whether New York municipalities should be permitted to issue similar securities.
The bill says the state should attract investors who “for personal, moral or religious reasons are unable to use conventional debt instruments such as bonds due to their inability to purchase securities that generate interest.”
Parker’s sponsor memo is more explicit. It says investors from “nations from the Persian Gulf, South East Asia, and other emerging markets” are “seeking investment opportunities abroad that comport with their religious beliefs as Muslims, namely a prohibition on interest.”
“This precludes them from using conventional debt instruments such as bonds. These Investors use sukuk,” the memo states.
The Assembly companion, A2106, is sponsored by Assemblyman Charles Fall, Staten Island’s first Muslim assemblymember and a former New York City “Citywide Islamic Liaison.”
Parker has also publicly promoted Islamic finance in New York. In 2025, the state Senate adopted his resolution celebrating “the rise of Shariah-compliant finance in the American marketplace.” Winters reported that Parker later said S3901 would “compel the state government” and, while invoking Mayor Zohran Mamdani as the city’s “first Muslim mayor,” declared: “We could change that with a stroke of a pen by putting my law into practice.”
The proposal is not new. Earlier versions passed the Senate 43–20 in 2021, 41–20 in 2022 and 42–19 in 2023 before dying in the Assembly.
Sukuk are widely used in Muslim-majority countries, including Saudi Arabia, which operates a sovereign sukuk program. The political question in New York is therefore not whether such instruments exist elsewhere, but whether state government should be required to redesign its financing structure around an explicitly Islamic prohibition on interest.
S3901 was re-referred to the Senate Banks Committee on Jan. 7, 2026, while A2106 remains in the Assembly Economic Development Committee. Neither has received a floor vote in the current session.
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