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).
