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The Credit Union Movement in Vermont: A Brief History

Introduction Background Early Years 1945-1954 1955-1960

 1960-1968 1968-1982 1982-Present Conclusion Notes

Early Credit Unionism in Vermont

While the credit union movement was rapidly spreading across the country under Bergengren's leadership, it was slow to arrive in Vermont. Sparsely-populated and rural, the state had not attracted the attention of the CUNEB's organizers (who tended to find industrial settings the most fertile ground for establishing new credit unions), and it remained one of just a handful of states to have no credit union enabling legislation on the books by the early 1930s. However, the ability to legally organize credit unions in the Green Mountain State was finally ensured by the passage of the Federal Credit Union Act in 1934, and the initial few credit unions were established in the subsequent decade.

Evidence of Vermont's first credit union can be found in Roy Bergengren's 1935 book CUNA Emerges, in which he includes contact information for the "Burlington Rendering Company Federal Credit Union." Located on the waterfront of Lake Champlain where Leddy Park is today, the Burlington Rendering Company was a large industrial enterprise that, in the 1930s, specialized in processing and producing "Tallow, Bones, Grease, Oils, Soaps, Hides, Corenco Brand Fertilizers, [and] Meat Scraps."1 The credit union continued to serve the employees of the Burlington Rendering Company for the next several decades before the credit union was liquidated in 1963.2

The Vermont movement grew slowly but steadily for the remainder of the 1930s, and the state's oldest continuously operating credit union (the Vermont VA Federal Credit Union) opened its first account on January 1, 1939.3 However, some groups (particularly farmers in rural communities) found the red tape that came with organizing under the Federal credit union law to be cumbersome, and they began pushing for the option of starting a credit union with a state charter. This campaign soon sparked legislative interest, and, on February 21, 1941, the Committee of Agriculture recommended to the full Vermont House a bill entitled, "H. 185 An act to provide for the organization and regulation of credit unions and to prescribe their powers and duties."4

The "Little Man," a symbol of the credit union movement, hangs up his umbrella and prepares for war.H. 185 encountered no opposition as it made its way through the Vermont House and was passed unanimously by that body on February 27.5  However, in order to become law, it also needed the approval of the State Senate, where it caused a bit of controversy. Upon receiving the House version of the bill, it was referred to the Banking Committee. After examining the issue, that committee came to the conclusion that they "could see no necessity for such a lengthy measure due to the fact that credit unions could be organized today under a Federal Act," and thus recommended that the Senate reject the bill. That advice seems to have fallen on deaf ears, however, and it passed on March 20 by a vote of twenty-one in favor to seven opposed. Indeed, in the time between the Banking Committee's recommendation and the full vote, at least one committee member, Senator Niquette of Chittenden County, had a change of heart. Explaining why he voted against the measure in the Committee before supporting it in the full Senate, Niquette stated that:

"The benefit to be realized from this act as has been explained by Senator Smalley is to make it easier for farmers to organize such unions without Federal 'red tape,' and as stated by Senator Douglass to allow credit unions to be organized among the workers in industries where they would be of great benefit. If the farmers prefer regulations such as advanced in this act to Federal regulation, I see no reason why they should not be allowed to try it out. I, therefore, will, for the reasons above stated, reverse my stand with the committee, and will vote 'yes' on this question."6

 Shortly thereafter, the bill was sent back to the House with a few amendments, and the House approved the Senate version on April 7.7 Governor William H. Wills signed it the following day, and AN ACT TO PROVIDE FOR THE ORGANIZATION AND REGULATION OF CREDIT UNIONS. TO PRESCRIBE THEIR POWERS AND DUTIES AND TO MAKE AN APPROPRIATION THEREFOR went into effect on June 1, 1941.
.
While the addition of the option to organize under state supervision provided a boost to Vermont's credit union movement, its effect was soon tempered by the onset of the Second World War. The scale of that conflict dwarfed anything previously seen in human history, and it required a great level of involvement and sacrifice on the part of the civilian population. Millions of men and women were mobilized into the armed forces, and civilian consumption of "non-essential goods" was restricted through rationing and strict regulation of credit. Given that the "bread and butter" of  credit unions at that time was the provision of small consumer loans, such wartime restrictions were severely trying for the American movement. Many institutions were able to partially offset the loss of patronage by selling war bonds, but, nonetheless, the number of credit unions in the United States declined from 9,891 in 1941 to 8,680 in 1945.8
    

1 Statement of the Burlington Rendering Co. to the Champlain Transportation Co., Special Collections, University of Vermont Library.

2 Communication with NCUA.

3 Vermont VA Federal Credit Union, Dollars and Sense (Winter 2009): 1.

4 Journal of the House of the State of Vermont, 1941, 186.

5 Ibid., 232.

6 Journal of the Senate of the State of Vermont, 1941, 287-8.

7 Journal of the House of the State of Vermont, 1941, 516-7.

8 Ian MacPherson, Hands Around the Globe: A History of the International Credit Union Movement and the Role and Development of the World Council of Credit Unions, Inc. (Victoria, Canada: Horsdal & Schubart, 1999), 37.

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