AUSTIN, Texas. (1/7/13)--The Texas Credit Union League (TCUL) is working closely with a Muslim group that seeks to charter a new credit union.
The group has filed a charter application with the Texas Department of Credit Unions. Jafari No-Interest CU would operate out of the Houston area, the department confirmed to News Now. The proposed new credit union will serve Muslims residing in Houston, Dallas and Austin and who follow the Jafari School, commonly known as Shia Muslims.
Linda Winkfein, vice president of the small credit union development at the Texas league, and Lorri Gaither, assistant vice president of small credit union development, have worked closely with the credit union's organizer, Imran Dhanji, according to Linda Webb-Manon, TCUL vice president of public relations and communications.
Winkfein and Gaither have put Dhanji organizers in touch with mentors who shared best practices and provided guidance on credit union operations, Webb-Manon said.
"Linda and Lorri have both commented on how impressed they have been with the credit union's organizer," Webb-Manon told News Now. "Determined to make this credit union a success, he has eagerly accepted their assistance and is open to gaining as much knowledge and information as possible."
The Texas Department of Credit Unions has 60 to days to approve the charter upon completion of the application, according to Betsy Loar, assistant commissioner and general counsel for the department.
As part of the application process, the credit union organizers must submit a business plan that outlines how the credit union will be funded, Loar told News Now.
The applicants must also receive share insurance approval from the National Credit Union Administration, Loar said. The league will assist credit union organizers with the insurance approval process, Webb-Manon said.
The proposed Jafari No-Interest CU is not the first credit union to serve the Muslim population. North Jersey FCU, with $198 million assets, Totowa, N.J., was the first credit union to offer products based on Islamic religious law, or Sharia law. It serves an unbanked population of Muslims in North Jersey (News Now Jan. 23).
It offers mortgage loans through Reston, Va.-based Guidance Residential. Mortgages are approved by an independent board of Sharia scholars. The loans also comply with the federal truth-in-lending law, but are different from conventional mortgage loans. Although sharia-compliant mortgages can be structured in several ways, Guidance Residential uses a method in which the buyer and the lender create a partnership to purchase a house.
North Jersey FCU's deposit accounts are structured to pay dividends rather than interest to its Muslim members.