The history of credit unions depicts an important change in financial and cooperative services. In the 19th century, credit unions started to offer affordable banking and loan services to customers and paved the way for a fairer financial market. Read more about the history of credit unions in our second blog article.
“Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.” (International Co-operative Alliance)
Credit unions are financial cooperatives which are owned and run by their members. They still adhere to the above-mentioned values. Even though credit unions now exist all over the world, the cooperative banking movement started in Europe with the German cooperative innovator Hermann Schulze-Delitzsch. He established the first credit unions in mostly urban areas in the 1850s. A decade later, Friedrich Wilhelm Raiffeisen brought the cooperative banking concept to rural parts of Germany. From there, the credit union movement spread across the globe.
Beginning of credit union history in Canada
Alphonse Desjardins, a Canadian parliamentary reporter founded the first successful credit union in Canada in 1900. It was known as caisse populaire (people’s bank) and situated in Lévis in the province of Québec. Then, the caisse populaire began with an initial total membership deposit of $26. A dime was the first individual savings deposit. After the favorable example in the French-speaking part of Canada, attempts in the English-speaking areas were made. However, most of them were not widespread or at all successful until the early 1940s. From then on, credit unions spread and were established all over Canada. These credit unions and caisses populaires now serve over 10 million customers.
Next stop: credit unions in the United States
The Canadian Alphonse Desjardins devoted his remaining life to the credit union development in North America. In 1908, he also founded the first American credit union, St. Mary’s Bank in Manchester, New Hampshire. Furthermore, two Americans became the key figures of the American cooperative banking movement: Pierre Jay, the Massachusetts banking commissioner and Edward A. Filene, a Boston merchant. They studied credit unions in Europe and corresponded with Desjardins, resulting in the first state credit union act in the United States. Today, there around 6,000 credit unions in America with more than 100 million members.
Up next: successful election organization in credit unions