The History of Credit Unions
August 28, 2019
As a member of Saint Lawrence FCU, you know credit unions are always striving to serve their members and community. We value each member’s input as an equal owner in the credit union, and we offer flexible loan terms, low-cost accounts and higher dividends to help members achieve and maintain financial wellness.
Both credit unions and banks provide consumers with financial services and products, but there are many distinctions between the two. The primary credit union difference lies at its core: Banks are created to generate profit for owners while credit unions are created to provide members with a place to manage their finances at the best possible terms.
The goal of putting members first is deeply rooted in the history of the credit union movement.
The first credit union was established in 1864 by Friedrich Raiffeisen in southern Germany. Raiffeisen proposed that all community members pool resources so individuals in need of loans could easily access the necessary funds. Raiffeisen’s idea was well-received, and the first credit union model was soon established.
In 1909, the credit union movement reached American shores. With Edward Filene serving as its pioneer, the movement gained momentum and continued to grow. In 1920, Filene hired attorney Roy F. Bergengren to assist him in generating the movement’s expansion. Bergengren created a more systematized concept for the credit union we know today.
In 1934, President Franklin D. Roosevelt signed the Federal Credit Union Act into law. Federally chartered credit unions in every state were legally authorized to create a system of not-for-profit cooperatives to promote thrift and sound financial practices.
In 1970, the public’s confidence in the credit union model grew stronger as the National Credit Union Share Insurance Fund was established. With it, credit union deposits became federally insured much like the FDIC insures bank deposits.
The credit union movement was growing at its most rapid pace, with credit union assets in America tripling between 1970 and 1979. Then, in 1977, another credit union-friendly regulation was signed into law, empowering credit unions to offer more services and products to members.
Today, the credit union movement continues to thrive and is backed by the “full faith and credit of the United States Government.” These not-for-profit institutions serve more than 103 million members by always putting their members’ needs first.
Here at Saint Lawrence FCU, we’re proud to join the chain of institutions committed to the credit union mission. As a member-owned cooperative, our only objective is your success.
Be a part of credit union history by calling, clicking or stopping by Saint Lawrence FCU today to benefit from our personalized service.