A group of Muslims from the Houston and Dallas areas havesubmitted an application to charter a new credit union, JafariNo-Interest Credit Union, which they hope to operate out ofHouston, the Texas Credit Union Department said.
|According to Betsy Loar, assistant commissioner and generalcounsel for the Texas Credit Union Department, Jafari No-InterestCU would operate on a fee basis in lieu of charging interest onloans and paying interest on accounts.
|She said the agency is currently reviewing the application andrequesting additional information.
|“In order for the department to approve an application for a newcharter, the applicants must show that the credit union will beviable,” Loar said. “That is, the applicants must present abusiness plan showing how the credit union will become profitablewithin a reasonable period and how it will be funded in themeantime.”
|The applicants will also need to receive share insuranceapproval from the NCUA, she said.
|The proposed credit union intends to serve Muslims residing inHouston, Dallas and Austin who follow the Jafari School, commonlyknown as Shia Muslims, according to the agency.
|Jafari No-Interest CU wouldn't be the first credit union withsome or all of its services designed especially for Muslims. In 2010, the $214 million, Totawa, N.J.-based North Jersey Federal Credit Union developed a banking divisionthat complies with Islamic law, or Sharia, which prohibits Muslimsfrom paying or receiving interest.
|The $62 million, Sugar Land, Texas-based Pioneer Muslim Federal Credit Union was formerly astate-chartered credit union and recently converted to a federalcharter, Loar said. She noted that the Texas Credit UnionDepartment does not currently regulate any Muslim credit unions inthe state.
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