This article was first published in Islamic Finance news Volume 16 Issue 42 dated the 23rd October 2019.
Aliredha Walji, Vice President, USA, writes in an article that was featured in Islamic Finance News about one of the areas that has seen some development in the US — albeit minor — the area of credit unions.
Muslims have long believed in the prohibition of interest, and many wish to align their finances in accordance with this Islamic value. One of the areas where this has seen some development in the US — albeit minor — is the area of credit unions. Credit unions are nonprofit institutions whose function is to encourage saving among its members as well as offer loans to people of ordinary means. They can be set up at either a federal or state level.
Perhaps the only one of its kind in the US, the Jafari No-Interest Credit Union (JNICU) based out of Houston has been in existence since 2016 and currently serves approximately 250 members. Because Texas law requires a defined field of membership for credit unions, membership is limited to those living in Houston, Dallas or Austin and their direct family members. This limitation on membership is perhaps the biggest challenge facing the growth of the no-interest credit union. The workaround — gaining federal status — would require a minimum of 500 members relatively quickly upon inception, and 2,000 members in three to five years.