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.