What
is a credit union?
What benefits do credit union members receive?
How can I join a credit union?
How can I start a credit union?
History of Minnesota credit unions
History of credit union Movement
Contact us…
What is a credit union?
Credit unions are cooperative financial institutions, owned and controlled
by the people who use its services. Credit unions serve groups of people
that share something in common, such as where they work or live, or even
their nationality. Credit unions are not-for-profit, and traditionally
provide fewer fees, better service and lower rates on loans.
Once you deposit money into a credit union, you become a member and a shareholder. The democratic nature of a cooperative financial institution allows all members to have an equal voice in the operation of the organization.
You may be wondering what the difference is between credit unions and banks. While they both accept deposits, make loans and have other similarities, credit unions have one fundamental difference: they do not profit off of their members. Banks are owned by groups of stockholders and operated by paid boards of directors. Credit unions are owned by their members and are operated by volunteer boards of directors.
Deposits made by credit union members are insured by the National Credit Union Administration up to $100,000.
What
benefits do credit union members receive?
Founded on the basic democratic premise of the cooperative
movement, credit unions believe that access to low-cost financial services
is critical to the health and stability of ordinary citizens. In fact,
more than 90 million members in the United States’ 8,500 credit
unions trust that their credit union will provide the necessary services
to improve their financial well-being.
Credit union membership offers numerous benefits. Available services range
from simple savings to home equity loans to IRAs. Study after study has
revealed that on average, credit unions provide the best financial offerings
with fewer fees, lower rates on loans and higher rates on savings. And
credit unions continually score higher than all other financial institutions
in consumer satisfaction surveys.
Credit unions strive to deliver the best service possible to their most important asset – their members.
How can I join a credit union?
Credit unions work hard to meet the financial needs of consumers across
the nation and provide a viable alternative to banks, and numerous studies
have shown that credit union members receive financial benefits. Most
people join a credit union through their place of business, by their affiliation
with an organization, through a family member, or through several other
ways. To find a credit union that you may be eligible to join, click on
the link below.
Five Ways to Find a Credit Union
Although
credit unions exist solely to serve their members, they are limited by
law to the people they may serve. They serve members from defined “fields
of membership,” or the groups of people who qualify as members of
a credit union. These fields of membership are limited to those that have
a “common bond.” A common bond is a group of people who share
certain characteristics which set them apart from the general public,
such as certain companies or organizations, certain nationalities, or
people that live in a specific geographic location.
If you are not currently a member, here’s how to find a credit union to join:
- Use the Find
a Credit Union link, located on this page. You will be asked to
complete a series of simple fields such as city and county of residence,
occupation, or name of employer, religious affiliation, and associations
of membership. Find A Credit Union will then search its extensive database
to locate credit unions that serves your specific community, employer,
etc.
- Call The Minnesota
Credit Union Network at (800) 477-1034. A representative will help you
find credit unions in your area that you are eligible to join.
- Ask your boss.
Your company may sponsor a credit union or may know of a credit union
to which you have access. Plus, many employers offer direct deposit
of payroll to your credit union.
- Ask your family.
Is your spouse, parent, grandparent, aunt or uncle a member of a credit
union? If so, call and ask! Most credit unions allow their members’
families to join. Each credit union, however, may define “family”
differently – at some, only members of your immediate family are
eligible. At other credit unions, family may include extended family
members, such as cousins, uncles, and aunts.
- Ask your neighbors. Some credit unions have a “community” field of membership, serving a region defined by geography rather than by employment or some other association. Ask friends in the community if they know of a credit union you may join.
How
can I start a credit union?
If you or your organization is not currently served by a credit union,
you may want to consider starting your own. To organize a credit union,
you need to define the group your credit union will serve. Will it be
an employee-based credit union or based on another type of common bond?
In addition, your group needs to:
- Identify a leadership group;
- Find a sponsoring organization, such as an employer, church or organization; and,
- Contact the Minnesota Credit Union Network.
For more information, please contact the Minnesota Credit Union Network at (651) 288-5170, (800) 477-1034 or email us.
History of Minnesota credit unions
In 1923, a handful of ordinary working men and women pooled their resources
to form the first credit union in the state of Minnesota. They knew then,
as we know now, that access to high-quality financial services at affordable
rates was essential to improve the lives of their families and friends.
The first credit
union in Minnesota was organized for Minneapolis postal employees in the
spring of 1925. Fifteen workers attended that first meeting, held in the
Postmaster’s office. When the Minneapolis Postal Employees Credit
Union opened its doors, it had $146.25 in assets. By the end of that same
year, its assets had increased to $6,418. That credit union, known today
as US Federal Credit Union,
has continued to maintain itself and its original mission of providing
affordable financial services to its members.
Today, more than 160 credit unions exist in Minnesota. These organizations
serve a variety of groups...from the Ely Steelworkers Credit Union (serving
steelworkers in the Ely area) to the Latvian
Credit Union (serving members of specified Latvian organizations)
to General Mills Federal
Credit Union (predominantly serving employees of General Mills). While
each credit union is unique in the group(s) it serves and products it
offers, each practices the philosophy of the credit union Movement, “people
helping people.”
History of credit union Movement
The roots of credit unions are in the cooperative movement, with the main
goal of serving members. The Movement organized in Rochdale, England,
in 1844 before catching on in Canada in 1901 and in the United States
in 1908.
1844
In 1844 a group of weavers established the Rochdale Society of Equitable
Pioneers in England. They sold shares to members to raise money to buy
goods at lower-than-retail prices, and then they sold the goods to their
members at a cheaper rate.
1846
Friedrich W. Raiffeisen is considered the “father of the credit
union Movement” and organized the Heddesdorf CU in Germany in 1846.
He founded rural cooperatives to aid poor farmers, organized the first
central banking association to meet the liquidity needs of member credit
societies, and formed a total of 425 credit societies.
1850
Hermann Schulze-Delitzsch founded the first credit society in 1850 in
Germany. After some trial and error, this association came to closely
resemble the credit unions of today. He spent the rest of his life organizing
“people’s banks.” Only nine years after launching his
first credit cooperative, there were 183 “people’s banks”
with 18,000 members in Germany.
1907-1909
Edward Filene’s first introduction to financial cooperatives came
while he traveled in India in 1907. Two years after his return to the
US, he established the first American credit union in Manchester, New
Hampshire, called St. Mary’s Cooperative Credit Association in 1909.
He personally contributed more than $1 million, which would be comparable
to donating more than $17 million today.
1914
Alphonse Desjardins organized the first financial cooperative in Canada
and operated it out of his home. Six years after the co-op’s first
deposit of 10 cents, Desjardins had made loans totaling $200,000 without
losing a penny. By the year 1914, Canada was the home to 150 cooperatives.
1920s
In 1920, Edward Filene hired Roy Bergengren, an attorney from Massachusetts,
to help seek increased state and federal legislation to promote credit
unions. Bergengren became the director and co-organizer of the CU National
Extension Bureau in 1921. He also helped launch the US Movement’s
involvement in international development.
1934
In 1934, Congress passed the Federal Credit Union Act, which allowed credit
unions to organize anywhere in the US. The legislation allowed CUs to
incorporate under either state or federal law, a system that continues
today. The act was signed by President Franklin Delano Roosevelt.
After the signing of the Federal Credit Union Act, the idea of credit unions spread so quickly that the need for a national association arose. At a meeting in Estes Park, Colorado, CUNA (the Credit Union National Association) was formed and replaced the CU National Extension Bureau that was created by Roy Bergengren 13 years earlier. Bergengren then became CUNA’s first managing director.
1954
In 1954, CUNA established an international services department to extend
its reach beyond North America. At that time, there was no central, worldwide
organization of credit unions. In 1964 CUNA revised its charter to become
CUNA International, taking in credit unions and associations from Canada,
Latin America and elsewhere.
1963
President John F. Kennedy signed the Credit Union Bill into law on International
Credit Union Day in November of 1963. The bill allowed federal credit
unions greater operating flexibility.
1980s
The 1980s began with double-digit inflation, a recession and high interest
rates. Despite all that, credit unions continued to grow. The number of
credit unions dropped in the ‘80s, as a result of mergers and companies
going out of business. Yet assets grew steadily, rising an average of
20% each year.
1996
In July of 1996, the DC Court of Appeals ruled against NCUA’s policy
allowing credit unions to serve multiple common bonds in one field of
membership. The credit union movement rallied support once again, launching
the CU Campaign for Consumer Choice. The campaign was successful in gaining
a Supreme Court hearing on the field of membership issue. This made passage
for HR 1151.
1998
HR 1151, also known as the Membership Access Act, allows federal credit
unions to reach out to new members, such as small businesses and low income
communities. President Clinton signed the CU Membership Access Act, or
HR 1151, August 7, 1998.
Copyright © 2002 Minnesota Credit Union Network