 | Stan Cowan
has worked in the financial industry for over eight years and is currently VP of marketing for Boeing Wichita Credit Union. His education includes a BBA and MBA from Wichita State University. He also teaches part-time for the Wichita branch of Baker University. Stan can be reached at (316) 651-5169 or scowan@bwcu.org |
Banking & Finance
2004-12-01 10:02:00
The history of credit unions
ANSWER: From their early origins, credit unions were unique depository institutions created, not for profit, but to serve members as credit cooperatives. The earliest financial cooperatives date back to the beginning of 19th century in England. However, in the mid-1800's Germany was the home of the first credit unions as we know them today: • Democratically governed; • Each member having one vote; • Member-elected board of directors; and • Volunteer based. These early German credit unions were organized by Herman Schulze-Delitzsch and Friedrich Raiffeisen. The crop failure and famine of 1846 caused Schulze-Delitzsch to organize a cooperatively-owned mill and bakery which sold bread to its members at substantial savings. Schulze-Delitzsch took this cooperative notion to address the needs of credit. In 1850, he organized the first cooperative credit society, known as the "people's bank." In 1900, the credit union concept crossed the Atlantic to Levis, Quebec, where Alphonse Desjardins organized La Caisse Populaire de Levis. A court reporter, Desjardins became aware of the outrageous interest being charged by loan sharks and organized the credit union to provide relief to the working class. In 1909, Desjardins helped a group of Franco-American Catholics in Manchester, New Hampshire organize St. Mary's Cooperative Credit Association--the first credit union in the United States. By 1925, 26 states had passed credit union legislation. By 1930, that number grew to 32 states with a total of 1,100 credit unions. In 1934, President Roosevelt signed the Federal Credit Union Act into law, authorizing the establishment of federally chartered credit unions in all states. The purpose of the federal law was "to make more available to people of small means credit for provident purposes through a national system of cooperative credit..." More next month...
