ALEXANDRIA, Va. --The National Credit Union Administration announced Friday afternoon that it has approved the federal insurance of members' accounts for a credit union recently chartered by the Texas Credit Union Department.
Jafari No-Interest CU was officially chartered Feb. 16, making it the first credit union in the nation this year and the first state-chartered credit union in Texas since 2008.
Houston-based CU will serve approximately 23,000 potential members of three religious associations located in the Austin, Dallas and Houston areas of the Lone Star State.
The new credit union expects to open in the spring and plans to offer regular share accounts, unsecured loans, share-secured loans and vehicle loans.
Instead of charging interest, Jafari No-Interest CU, plans to 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.)
The Cornerstone Credit Union League also announced Friday that Jafari No-Interest CU will be a member of the league.
Cornerstone noted that the credit union was formed to provide financial services for community members and families of the Islamic Education Center of Houston, the Islamic Ahlul Bayt Association in Austin, or the Metroplex Organization of Muslims in North Texas.
According to a proposal document
The chartering process for the credit union took about four years, according to Cornerstone. In 2012, the group behind Jafari contacted Linda Winkfein, Cornerstone's VP of Small Credit Union Development, who started providing direction and guidance to get the group started on their chartering course.
After Winkfein died in February 2014, the new VP of small credit union development at Cornerstone, Lorri Gaither, assumed responsibility for guiding the group toward a completed charter.
"Going through the chartering process, we have seen firsthand that the cooperative spirit of the credit union movement is alive and well," said president and CEO of the credit union Imran Dhanji, in a statement. "Many credit unions have willingly offered their expertise and guidance to help us achieve this milestone, and we would like to express our heartfelt appreciation for their support. We are proud to be a part of the credit union movement and look forward to being an active member of the Cornerstone Credit Union League."
The credit union also received help from prominent leaders in the credit union community, including Mentor James Tuggle, Jr., CEO of Transtar Federal Credit Union, a $36 million institution also based in Houston.
"It's been a pleasure to help in any way we can," said Tuggle. "It's always good to see us adding credit unions versus the alternative. This model still works, so we need to figure out how to keep adding them."
Dhanji also expressed his appreciation for the Texas Credit Union Department and, in particular, Commissioner Harold E Feeney.
"Chartering credit unions that provide consumers with access to affordable services is an extremely satisfying part of my job," said Feeney. "We are very pleased to welcome this new organization as a Texas state-chartered credit union and commend the board and management of Jafari No-Interest CU for their hard work, dedication, and resolve."
Jafari No-Interest CU is not the first "Islamic" credit union – there have been a number of others, including the $121 million Pioneer Mutual Federal Credit Union in Houston and $113 million Nizari Progressive Federal Credit Union of Sugar Land, Texas.
