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.
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.
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.