A Brief Credit Union History
 

Friedrich Wilhelm Raiffeisen (1818-1888)

"It is not too difficult to organize a credit union, since a need for credit unions exists almost everywhere and their usefulness is quite obvious. It is much more difficult to see that a credit union has and maintains the proper spirit from the very beginning, that it has competent leadership, and particularly that its business affairs are handled accurately."

  

 

Credit unions have a long history of helping people. They are based on a simple idea: People should be able to pool their money and make loans to each other.

The idea of credit unions began in Europe in the mid 1800s when groups of farmers in England and Germany created credit societies. In 1864, a man named Friedrich Raiffeisen formed the credit union as we know it today. People cooperated with each other to save their money and loan it out to each other at a low rate. Their personal character was the principal security for loans.

In 1900, a man named Alphonse Desjardins imported the credit union idea to Canada. He created North America's first credit union in Levis, Quebec.

Seven years later, Edward A. Filene -- the owner of a store in Boston -- traveled to India and was inspired by groups of workers who had set up their own credit societies. Filene was a progressive businessman who advocated workers rights. He established minimum wages for female workers and favored a five-day, 40-hour week. At the time, such ideas were revolutionary and controversial. You may be familiar with Filene's Basement, a store that still operates today.

Filene returned to America and began to build the Credit Union Movement in the United States. He enlisted the help of his friend Roy F. Bergengren, an attorney known for his intelligence and ability get things done.

In 1937, The Federal Credit Union Act was amended to assure tax exempt status for credit unions. Credit unions earn the tax exempt status because of their non-profit, cooperative structure, which still exists today.

In 1935, when credit unions were helping Americans through the Great Depression, the treasurer of a Midwestern credit union said that credit unions were "not for profit, not for charity, but for service," and that philosophy holds true today.

Credit unions continue to look out for their members’ interests and provide a level of service that is not generally available at other financial institutions.

Today, nearly 10,000 credit unions in the United States serve millions of people. The World Council of Credit Unions helps countries across the globe develop their own credit union movements.