The credit union movement began with a simple idea – that people could achieve a better standard of living for themselves and others by pooling their savings and making loans to neighbors and co-workers.
A credit union is a cooperative financial institution that is owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.
The history of credit unions began in 1844, with a group of weavers in Rochdale, England, who established the Rochdale Society of Equitable Pioneers. They sold shares to members to raise the capital necessary to buy goods at lower than retail prices, and then sold the goods at a savings to members. In doing so, they became the first credit union.
- 1849 — Germany — Hermann Schulze-Delitzsch, a lawyer, establishes a credit society to help shopkeepers and urban workers find relief from loan sharks. Friedrich Raiffeisen, considered the German founder of credit cooperatives, also actively works to ensure better financial services for the working class.
- 1901 – Canada – It was a Canadian who transplanted the credit union to the Western Hemisphere. In 1900, Alphonse Desjardins organized a credit union (caisse populaire) in Levis, Quebec. The reasons were the same as those in Germany 50 years before. People were poor, interest rates were financially crippling, and the credit union offered a way out. That first Canadian credit union was small by modern standards. The first savings deposit was only 10 cents; the first collection from all the members totaled only $26. Even today, in some countries, credit unions start small. But Desjardins persevered and devoted a good part of his life to credit union development in North America. He founded other credit unions, including the first one in the United States.
- 1908 – United States – By the beginning of the twentieth century, thousands of immigrants pursuing work and a better life found their way to the mills of the largest textile-manufacturing center in the nation – Manchester, New Hampshire. Although gainfully employed, they were denied the privileges of savings and credit. With counsel and guidance from Canada’s credit union movement leader, Alphonse Desjardins, and the commitment of local attorney Joseph Boivin to serve as the first president and house the credit union in his home, Monsignor Hevey and his parishioners established the first credit union in the United States in 1908. Originally called St. Mary’s Cooperative Credit Association its name was revised in 1925 to La Caisse Populaire Ste.-Marie, or “Bank of the People,” St. Mary’s.