What is a credit union?
What exactly is a credit union?
Credit unions are full-service financial institutions that can help you realize all your financial goals. Members have access to the same products, services, and benefits that are offered by other financial institutions. Where credit unions differ is that they are not-for-profit financial cooperatives owned by and operated for the benefit of the members they serve. Credit unions serve their members, not Wall Street investors.
Credit unions are cooperatives, or an organized group of people with some common bond. Examples of a common bond may be your employer, the community in which you live, a faith-based organization, school, or military, just to name a few. Credit unions generally operate under government charter and supervision and members elect a board of directors to manage the credit union to ensure that their best interests are represented.
How did credit unions start?
The credit union movement began with a simple idea that people could achieve a better standard of living for themselves and others in their community by pooling their savings and making loans to their neighbors, co-workers and family.
In 1864 Friedrich Raiffeisen started the first rural credit union in Germany. His not-for-profit financial institution proposed that community members pool their resources. As a result, individuals within the community that needed loans could access the funds.
In 1900 Alphonse Desjardins expanded on the idea of cooperative financial institutions from Europe and introduced them in Canada. His organization was the precursor to the current North American credit union started by Edward Filene. Most known for building the Filene’s department store chain, Edward Filene and Pierre Jay, the Massachusetts banking commissioner helped organize public hearings to establish credit union legislation in the United States. One year later in 1909, the first U.S. credit union law was passed in Massachusetts and Alphonse Desjardins formed the first credit union in the United States, St. Mary’s Cooperative Credit Association in Manchester, New Hampshire.
To learn more about the history of credit unions, check out the National Credit Union Administration’s historical timeline.
Credit unions are people helping people.
Credit unions are comprised of people helping people – they have an interest in supporting and advancing their communities. They work hard to improve members’ savings; help them invest in their homes, businesses, and education; and secure a stronger financial future. No matter what life brings, America’s credit unions have always been there to help strengthen the financial lives of individuals, families, and businesses in their communities. The credit union difference comes with more than a century’s long proven track record of doing right by their members.