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The Credit Union Movement in Vermont: A Brief History

Introduction Background Early Years 1945-1954 1955-1960

 1960-1968 1969-1982 1982-Present Conclusion Notes

Historical Background of the Credit Union Movement

As democratic financial institutions owned by their members, credit unions can trace their roots back to Germany in the late 1840s, where Hermann Schultz-Delitzsch and Friederich Wilhelm Raiffeisen began experimenting with the model as a way of providing credit to people of modest means. After spreading through continental Europe in the late 19th century, the first credit union in North America was founded in 1900 in Levis, Quebec. Inspired by the writings of European cooperators and shocked by a case in which a loan-shark had charged a poor family 1200% interest on a small loan, Alphonse Desjardins established the first caisse populaire, or "people's bank," as a way of cooperatively providing credit to people of of modest means.

Desjardins actively worked to spread the model to other communities in Quebec, and the first credit union in the United States was founded with his help at a french-speaking Catholic parish in Manchester, New Hampshire in 1908 (the original building is now the site of America's Credit Union Museum). Desjardins work caught the eye of the Boston philanthropist and social reformer Edward
Filene and, during one of Desjardins' organizing trips, the two men met with Massachusetts' Banking Commissioner Pierre Jay to craft credit union enabling legislation, which the state of Massachusetts enacted in 1909.

Filene remained a staunch supporter of the credit union cause until his death in 1937, and he used his personal wealth to bankroll the Credit Union National Extension Bureau (CUNEB) which, under the able direction of Roy Bergengren, fought for the passage of state and Federal credit union enabling legislation and provided support for groups wanted to start credit unions. As a result of this
work, credit unions spread rapidly throughout the United States and, in 1934, the Credit Union National Association was established at a meeting in Estes Park, Colorado.1

 

1 For a detailed discussion of early credit unionism, see: J. Carroll Moody and Gilbert C. Fite, The Credit Union Movement: Origins and Development, 1850-1980 (Dubuque, Iowa: Kendall/Hunt, 1984).

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Association of Vermont Credit Unions
1000 Shelburne Road, So. Burlington, VT  05403-6960
Tel: 802-863-7848     Fax: 802-864-4391