Since we’re celebrating the birth of our country this week, we thought we’d take some time to share the birth of the credit union movement with you.
Would you be surprised to know that credit unions first started in Germany? In the 1850s, two gentlemen opened the first credit unions. Cooperative pioneer Hermann Schulze-Delitzch created the first retailer-based, urban credit union. It served traders, shop owners and artisans.
Around the same time, Friedrich Wilhelm Raiffeisen founded the first rural credit union for ex-serfs who had smaller and less predictable incomes. By 1913, there were over two million credit union members in Germany. The movement soon spread throughout Europe including Belgium, Italy, France, England, Switzerland and British India.
The first credit union in North America started in Quebec in 1901 with just a 10¢ deposit. In the United States, St. Mary’s Bank of Manchester in New Hampshire was the first credit union. It was founded in 1908 to serve French-speaking immigrants who moved to New Hampshire from Canada.
The credit union movement got an additional boost from central banker Pierre Jay and Boston merchant and philanthropist Edward Filene. They helped establish legislation in 1908 which became known as the Massachusetts Credit Union Act of 1909. This served as a model for the Federal Credit Union Act of 1934, which was signed into U.S. legislation by President Franklin Roosevelt.
There are now currently over 5,600 credit unions in the United States serving more than 116 million members.