The Credit Union History and Philosophy
Credit Unions – How They Started
Credit unions were born of hard times. About the middle of the last century, the industrial revolution brought with it social and economic upheaval. To make matters worse, the banking system in those days was designed to provide capital for industrialization, not to respond to the needs of everyday people.
As a result, credit unions came into being for a very simple reason- the ordinary individual had almost no chance of securing a loan for any purpose – except at prohibitive rates which tended to worsen rather than alleviate the plight of the borrower.
Recognizing that the existing financial system would be of no help in breaking that cycle, the credit union pioneers concluded that the people would have to help themselves. Here, then, was the first enunciation of one of the guiding principles of the credit union movement – people pooling their resources to help one another. The idea of a credit union had been born.
Credit Union Common Bond
A credit union is the only financial institution based upon the principle that members share a common bond of employment, association, or community. Originally, this requirement was intended to identify groups of people who lived or worked close to one another and therefore could conveniently form a cooperative, non-profit, member-owned financial institution. Since then, the principle of a common bond has been expanded to allow a single credit union to serve several different common bond groups.
The common bond not only makes the credit union movement unique, it also has deeper implications in the lives of credit union members. Your credit union common bond is not just a principle; the common bond reflects a community of interest, a community of members united through shared experiences and goals. At the credit union you are truly a part of a vital economic association that influences and betters your life.