Riba-Free Salaam Credit Union is a foundation institution and vehicle for economic empowerment of Muslim individuals and communities in North America. Working collaboratively with all to stand it up and operationalize it for the Muslim community is a very important priority thus Salaam Way is devoting considerable resources to actualize it.
What’s a Credit Union?
A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members. It is member-owned and controlled through a board of directors elected by the membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution which exists to benefit them, not to make a profit.
Will Salaam Way Own Riba-Free Salaam Credit Union?
No Salaam Way will not own Riba Free Salaam Credit Union. The Member will own it. Most financial institutions are owned by stockholders, who own a part of the institution and intend on making money from their investment. A credit union doesn’t operate in that manner. Rather, each credit union member owns one “share” of the organization. The user of credit union services is also an owner, and is even entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.
How did credit unions start?
The first credit union cooperatives started in Germany over a century ago. Today, credit unions are found everywhere in the world. The credit union movement started in this country in Manchester, New Hampshire. There, the St. Mary’s Cooperative Credit Association, a church-affiliated credit union, opened its doors in 1909. Today, one in every three Americans is a credit union member.
What is the purpose of a credit union?
The primary purpose in furthering their goal of service is to encourage members to save money. Another purpose is to offer loans to members. In fact, credit unions have traditionally made loans to people of ordinary means. Credit unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are nonprofit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services, such as offering Riba-Free services as proposed for Salaam Credit Union.
Are savings deposits insured?
Yes. All savings accounts are insured up to $250,000 by the NCUA, the National Credit Union Administration, an agency of the federal government.
Who can join a credit union?
A credit union exists to serve a specific group of people, such as a group of employees or the members of a professional or religious group. This is called a “field of membership.” The field of membership may include where they live, where they work, or their membership in a social or economic group.
What is Salaam Way proposed field of membership/who can join Salaam CU?
Membership is for all Muslims in Texas open to Muslims anywhere in Texas to start and then USA-wide afterwards, followed by North-America wide after that. All Muslims in North America are therefore encouraged to support this community-focused initiative.
Will Visa® Check Cards (debit cards) be offered to members?
Yes, every checking account shall have free Visa Check Card
Will I be able to Operate My Salaam C.U Account in my Company’s Current Credit Union?
We need this institution for our community. How Can I help?
Sign Up today to show your support and interests. In the research and modelling work that Salaam Way performed 25,000 is the minimum number that makes standing up Riba-Free Salaam Credit Union viable. We need this minimum number of signature of support to move forward with the due diligence of standing up Members-owned, Riba-Free Salaam Credit Union for. If you have time or skills to help, kindly volunteer as well. We need all of us to make this happen for us
How will Riba-Free Salaam Credit Union Make Money?
Riba is haram but profit is halal. Modest fees will be charged for services performed. Furthermore since the institution will power the entrepreneurial spirit that is available in abundance within the community, Islamic finance of projects will yield returns that would make the institution viable.
What is the difference between banks and credit unions?
The main difference between banks and credit unions in the state of Texas and across the USA and Canada is that banks are for profit and credit unions are not-for-profit financial institutions. Banks are owned by shareholders, while credit unions are owned by members (all individuals who have established an account with the credit union). Because credit unions are not-for-profit cooperatives, they are able to offer lower loan rates, higher savings yields and more personal service than many other financial institutions.
Do credit unions offer the same services as banks?
Yes! Most credit unions offer a lot of the same services as big banks. Riba-Free Salaam Credit Union plans to offer Online Banking, Mobile Banking, so Salaam Credit Union members can check balances, transfer funds, make halal loan payments and much more – at home or on the go. Technology will be leveraged maximally to offer service offerings and provide the latest digital banking technology as well as top of the line banking services for members. Proposed services to be offered online include:
- Perform account inquiries
- Apply for a halal loan
- Download account statements
- View checks that have cleared
- Set up automatic transfers
- Name your own accounts
- Take line-of-credit advances
- Obtain info on investments
- Order checks
- Stop payment on a check(s)
- Make account transfers and loan payments
- Check the zakat exposure for an account
- Direct zakat to beneficiaries of choice
- Convenient Locations and More!
Who can I ask additional questions that I may have?
Contact us with any question you may have and we would get back to you as soon as possible