From their early origins, credit unions were unique depository institutions created, not for profit, but to serve members as credit cooperatives. The earliest financial cooperatives date back to the beginning of 19th century in England. However, in the mid-1800’s Germany was the home of the first credit unions as we know them today:

• Democratically governed;
• Each member having one vote;
• Member-Elected board of directors; and
• Volunteer based.

After the crop failure and famine of 1846, organizers started a cooperatively-owned mill and bakery which sold bread to its members at substantial savings. They then took this cooperative notion to address the needs of credit. In 1850, the first cooperative credit society, known as the “people’s bank” was formed.

In 1900, the credit union concept crossed the Atlantic to Levis, Quebec, where the La Caisse Populaire de Levis was formed to provide relief to the working class from outrageous interest rates being charged by loan sharks.

In 1909, the first credit union in the United States was formed – St Mary’s Cooperative Credit Association.

With the upswing of the U.S. economy in the 1920’s, the credit union movement became increasingly popular. People had more money to save and were able to afford products such as automobiles and washing machines. However, they needed a source of inexpensive credit. Because commercial banks and savings institutions were not generally interested in providing consumer credit, credit unions began growing.

By 1925, 26 states had passed credit union legislation. By 1930, that number grew to 32 states with a total of 1,100 credit unions.

In 1934, President Roosevelt signed the Federal Credit Union Act into law, authorizing the establishment of federally chartered credit unions in all states. The purpose of the federal law was “to make more available to people of small means credit for provident purposes through a national system of cooperative credit…”

Credit unions grew steadily in the 1940s and 1950s, and by 1960 credit union membership amounted to more than 6 million people at over 10,000 federal credit unions.

In 1970, the National Credit Union Administration was created to charter and supervise federal credit unions and the National Credit Union Share Insurance Fund (NCUSIF) was organized to insure credit union deposits. In the independent credit union spirit, the NCUSIF was created without tax dollars and capitalized solely by credit unions.