CREDIT UNION HISTORY

As the 20th century began, the credit union idea surfaced in Canada. Canada's successful efforts profoundly influenced two Americans: Pierre Jay, the Massachusetts banking commissioner, and Edward A. Filene, a Boston merchant.

The two men helped organize public hearings on credit union legislation in Massachusetts, leading to passage of the first state credit union act in 1909. Growth was slow, however. Fewer than 10 states passed credit union laws, many unworkable. The Massachusetts Credit Union Association grew slowly.
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Waking Up the Nation
In 1921, Filene created the Credit Union National Extension Bureau and hired a Massachusetts attorney, Roy F. Bergengren, to help him. Bergengren and the Bureau sought effective credit union laws in all states and at the federal level.

When Bergengren began his efforts, there were only 199 U.S. credit unions, but during the next 13 years, the credit union movement grew dramatically.

Filene poured more than $1 million of his own money into the project. Bergengren appeared before state legislators, laws were passed, and volunteer organizers were initiated into the "movement." By 1925, 15 states had passed credit union laws; 419 credit unions were serving 108,000 members. By 1935, 39 states had credit union laws and 3,372 credit unions were serving 641,800 members.

Credit unions banded together into leagues on a state-wide basis. Leagues provided financial and legal advice, organizing know-how, and an instrument for credit unions to seek favorable state legislation. But something more was still needed.

CREDIT UNION PHILOSOPHY

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. Whether it’s providing a loan to help a member cover unexpected medical bills, giving financial counseling to a member whose company closed its doors, or simply offering a better deal on a used car loan, credit unions make a difference for their members and the communities they serve.

The National Cooperative Business Association developed seven cooperative principles, which were adopted in 1995 by the International Cooperative Alliance. The principles are a modified version of the original Rochdale Principles, which were named after the first successful co-op, started in Rochdale, England in the 1840s.

The CUNA Cooperative Alliances Committee expanded on the seven principles in order to more directly reflect for credit unions’ structure and characteristics, including fields of membership, emphasis on member education, and desire to serve members from all walks of life, including people of modest means.

“We feel tailoring the NCBA principles in this way will draw more credit unions to them—and help them better understand the roots and values we share with other co-ops,” said William Herring, chairman of the CUNA Cooperative Alliances Committee and CEO of Cincinnati Central CU Inc.