AUSTIN, Texas – A group of Houston, Dallas and Austin-area Muslims has applied to state regulators to charter the first credit union that would be operated under Muslim law, that is a credit union that would be barred from charging interest on loans.
The Jafari No-Interest CU would instead build profit into the repayment agreement for a loan, with profit replacing interest, under the model of other Muslim-based lenders. The Jafari School is commonly known as Shia Muslims.
Texas has chartered one credit union for Muslims, Pioneer Muslim CU, but that Houston credit union is more conventional and charges interest on loans.
“This is obviously a very unique one if we can approve it,” Harold Feeney, director of the Texas CU Division, told the Credit Union Journal this morning.
If approved, the Muslim-law institution would be the first new credit union chartered in Texas since 2007.
