Credit Union History

From their early origins, credit unions were unique savings institutions created not for profit, but to serve members as credit cooperatives. The earliest of these date back to 19th-century England. However it was in mid-1800s Germany that we find the forbears of the Credit Unions, as we know them today, being: 

• democratically governed 
• granting each member one vote 
• steered by member-elected directors 
• and volunteer-based.

These early credit unions were created in 1846 when crop failure and famine struck Germany. Herman Schulze-Delitzsch organised a co-operatively owned mill and bakery which sold bread to its members at substantial savings, and a "people’s bank" that provided credit to farmers.

Friedich Raiffeisen formed the Heddesdorf Credit Union for German farmers in 1864, and the first Credit Union central bank in 1876. The credit union idea spread quickly through Europe. 

It crossed the Atlantic in 1900. Alphonse Desjardins, a Quebec court reporter, recognised problems caused by loan sharks and organised La Caisse Populaire de Levis, a Credit Union for the working class. In 1908, Alphonse Desjardins helped a group of Franco-American Catholics organise St. Mary’s Cooperative Credit Association, the first Credit Union in the United States.

The US Credit Union movement became increasingly popular in the 1920s economy. Edward Filene, a wealthy Bostonian, dedicated himself to developing the movement. In 1921 he financed the credit union National Extension Bureau and hired a lawyer named Roy F. Bergengren to run it. Bergengren travelled thousands of miles to promote the cause. In 1935 President Roosevelt signed a government charter for credit unions into federal law.

Edward Filene and Roy F. Bergengren began providing assistance for credit unions outside the United States. With their help, the movement spread to Nova Scotia, Canada, the Philippines and, in the 1940s, Jamaica and Belize. 

A Jesuit priest, Father Marion Ganey introduced Credit Unions into Fiji in the 1950s. He saw credit unions as a method by which poor people could organise their own affairs, by the promotion of thrift and provision for low-cost finance to their mutual advantage.

In 1954 the World Extension Department was created to give international direct assistance with credit unions, often in collaboration with government programmes. The World Council of Credit Unions was created in 1971 and it now has members and affiliates in 97 countries who serve more than 172 million credit union members.