Credit Union History

U.S. credit unions have a rich history that dates back to 1908. More than 100 years ago, the first credit union in the United States - La Caisse Populaire Ste-Marie, or St. Mary's Bank - was organized on Nov. 24, 1908, in Manchester, N.H. Over the past 100 years, credit unions have multiplied and grown. Today, more than 7,000 credit unions exist nationwide. Learn more about the history of both the U.S. and Minnesota credit union movement.
 

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, 154 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 the Credit Union Movement

Credit unions are rooted in the cooperative movement, with the main goal of serving members. The movement was 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.
1901		The first credit union in North America – the Caisse populaire de Lévis in Quebec, Canada – began operations on Jan. 23, 1901, with a 10-cent deposit. The financial cooperative was organized by founder Alphonse Desjardins who operated the credit union out of his home. Six years after the co-op’s first deposit, Desjardins had made loans totaling $200,000 without losing a penny. By the year 1914, Canada was the home to 150 cooperatives.
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 U.S., he established the first American credit union in Manchester, N.H., 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.
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 U.S. movement’s involvement in international development.
1925		The first credit union in Minnesota, Minnesota Postal Employees Credit Union, is organized.
1930		State credit union leagues organized in Alabama, Georgia, Illinois, Indiana, Iowa, Minnesota, Missouri, North Carolina, and Virginia.
1934		In 1934, Congress passed the Federal Credit Union Act, which allowed credit unions to organize anywhere in the U.S. The legislation allowed credit unions 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, Colo., 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.
1939		The 1930s concluded with almost no credit union failures during the Great Depression, versus large number of bank failures.
1948		The first International Credit Union Day on Oct. 21 commemorates 100 years of credit unions, beginning in Germany. CUNA Board set Credit Union Day as the third Thursday in October.
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.
1970		Independent Agency Bill creates National Credit Union Administration. First administrator, Gen. Herman Nickerson Jr., was sworn in on Sept. 21. National Credit Union Share Insurance Fund was created.
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 percent each year. Also in 1980 President Jimmy Carter signed H.R. 4986 allowing credit unions to issue share drafts to members.
1991		In response to congressional plan to merge bank and credit union regulators, CUNA held Operation Grassroots rally on Capitol Mall in Washington, drawing crowds of approximately 15,000 people. Hometown rallies were also held in congressional districts across the country.
1996		In July of 1996, the D.C. 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 H.R. 1151.
1997		The Minnesota Credit Union League and the Minnesota Credit Union Association merge to form the Minnesota Credit Union Network (MnCUN). Today MnCUN represents the state’s 158 credit unions and 1.5 million credit union members.
1998		H.R. 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 H.R. 1151, on Aug. 7, 1998.
2002		The Minnesota Credit Union Protection Act passes. The Act rewrote Chapter 52, the state chapter that governs Minnesota credit unions. The statute was rewritten to achieve parity with federal credit union laws, eliminating burdensome fees, assessments and restrictive regulations.
2007		Minnesota passes the nation’s first credit card data protection law. The law shifts the costs associated with data breaches from financial institutions to the merchants who mishandle consumers’ private financial data. The Minnesota Credit Union Network and credit unions throughout the state were the main supporters of the bill as it made its way through the legislative process.
2008		Credit unions survive the U.S. financial system meltdown.