About Credit Unions

What is a Credit Union?

When you choose a credit union to serve your financial needs, you have selected a financial institution with many unique characteristics.
  • Credit unions are not-for-profit financial cooperatives, member-owned and controlled. Unlike commercial banks and other financial institutions, there are no stockholders. The credit union is operated by its members for the benefit of all who belong. Profits are returned to the members in the form of dividends, competitive loan rates and low-cost services.

  • Credit unions have a volunteer Board of Directors, elected by their members/owners.

  • Credit union policy is “Once a Member, Always a Member.”  If you change employment, affiliation or residence, you do not have to close your accounts.
The Credit Union Difference

When you walk into our lobby, or call a loan officer, what makes Ashland CU different from a bank is not immediately apparent. The two financial institutions may offer similar products and services, but the similarities stop there. Crucial differences exist--in ownership, in cost of borrowing money, and in use of services.
  • You own your credit union. Credit unions are member-owned nonprofit financial cooperatives dedicated to improving members' lives. Stockholders own banks. Banks make money for stockholders, not for customers.

  • Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The president reports to this board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.

  • Credit unions generally have the best rates.  Banks price products and services to make a profit.

  • Credit union loan rates also are better. The average credit card interest rate is four percentage points better at credit unions vs. banks. And credit union auto loans average almost one and one-half percentage points less than banks' auto loan rates. Credit unions make consumer loans.  Banks offer consumer loans, but really emphasize business loans.

  • Credit unions educate members about money matters. They provide publications to keep you advised of rates, loan sales, and financial trends that affect you. Many banks simply advertise their rates and sell their services.
Because you are an owner of Ashland CU, you have a say in how we do business. Let us know how you think we are doing, and what services you want at your credit union.

Credit Union History

1844 - Members organized the earliest viable cooperative, the Rochdale (England) Society of Equitable Pioneers. Credit unions, which also are cooperatives, still practice many of Rochdale's original cooperative business principles.

1849 - A depression in Germany crushed townsfolk and farmers alike. One mayor, Wilhelm Friedrich Raiffeisen, organized one of the first credit unions. He rallied villagers to pool their savings and lend money to each other at low interest rates.

1900 - Alphonse Desjardins founded the first credit union in North America, in Levis, Quebec. Desjardins, a reporter, was outraged that "Poor borrowers had been obliged to pay to infamous usurers rates of interest amounting to several hundred percent for the most insignificant loans." Despite predictions of failure, the venture thrived.

1909 - Desjardins organized the first U.S. credit union, La Caisse Populaire Ste. Marie at Manchester, N.H.  Also in 1909, the first general state credit union act, enabling credit union organizing and chartering, became law in Massachusetts, with help from testimony by Desjardins and Edward A. Filene.

Filene, owner of a Boston department store, was a progressive activist who began profit-sharing and other novel benefit programs for his employees. Traveling in India in 1907, he discovered a village credit union and was struck with its potential. Filene said, "A hundred individuals acting individually, cannot possibly generate the money power which might be at their disposal if they were to act collectively with a credit union."

1921 - Filene created the Credit Union National Extension Bureau to champion credit unions by seeking federal legislation and increased state legislation. He hired Roy F. Bergengren, a Massachusetts lawyer, to help. There were just 199 U.S. credit unions when Bergengren began his work, but by 1935, there were 3,372 credit unions and credit union laws existed in 39 of the 48 states.

Bergengren said credit unions should offer three services--savings, credit, and education-- and that education was the most important.

1934 - Credit unions and leagues recognized the need for a national organization. At a meeting at Estes Park, Colorado, the Credit Union National Association (CUNA) was formed as a confederation of state leagues.

In the same year, Congress finally passed a federal credit union act, which permitted credit unions to be organized anywhere in the United States. The legislation allowed credit unions to incorporate under either state or federal law, a system of dual chartering that persists today.

Almost immediately after its organization, CUNA recognized a need for credit-union-oriented insurance services and standardized office supplies. So in 1935, CUNA formed the CUNA Mutual Insurance Society.

1945 - World War II halted progress of the U.S. credit union movement, but the war's end brought renewed credit union growth. In 1945, there were 8,683 credit unions in the country; by 1955, there were 16,201; and by 1969, the U.S. movement reached its peak of 23,876 credit unions.

Since then, the number of credit unions has declined, as many smaller credit unions have merged into larger ones that usually offer more services.  Membership, however, continues to climb.