So here we are on the eve of International Credit Union Day; a time to reflect and celebrate the credit union movement. In just over one month, it will be 99 years since the first credit union was founded in the United States.
In these days of trying times for credit unions, where interest margins are being squeezed, technology is progressing at dizzying speeds, and community charters are making competition stiffer than ever, I thought I would write a little love note to Edward Filene, Alphonse Desjardins, about why I get so fired up and passionate about this crazy movement, and why I love the people in it and those fighting to keep it fresh, relevant, and successful.
Consumers have changed dramatically over the last centuy. And credit unions need to change and keep up with the times, and with what their members expect of them today. Because broad things change slowly over time, we often miss the bigger picture.
Here’s the 30,000-foot view: The first credit union in the United States was started in November of 1908, and the majority of CUs were founded during the Great Depression, despite the banking industry’s best efforts to prevent them. During all of that time, life was hard for average working people, where men worked in mills for 10 hours per day, six days a week, and took home one dollar per day. Banks did not make loans to these workers. If you were very prosperous and somehow could get a bank loan, the rates would be sky-high, in some cases 25%. Banks were only interested in commercial lending, just as many still are. Regular people were simply not able, or could not afford, to get loans.
That’s the environment in which nearly all credit unions were founded. So the larger picture is that this wild and crazy idea that we could pool our money and make loans to each other, bypassing for-profit banks… well, it WORKED. The banks HAD to become more competitive in order not to lose ALL their personal business to credit unions, and they remain neck-and-neck competitive on rates with credit unions to this day.
So if credit unions did not exist, far fewer people could get loans, and those that did would have to pay far higher rates, thus slowing down our entire economy. So THANK YOU Credit Union professionals who go to work every day to make this country stronger by helping all of us help ourselves. Membership/ownership in credit unions is REAL and truly makes a difference to all of us, even if not all of our membership fully understands how special we are, and how important the work we do is to each member we serve, the community that we live in, and our entire economy.
Thank you to each of the thousands of credit union professionals across the world making a difference every day. May every credit union thrive and flourish for another 99 years.