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Member accounts at this credit union are federally insured up to at least $250,000 by the National Credit Union Administration. |
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What is a Credit Union? It all began in Germany in the mid-1800s when Herman Schulze-Delitzsch and Fredrich Raiffeisen were forced to do something to compensate for the crop failure and famine of 1846. Schulze-Delitzach organized a cooperatively owned mill and bakery that sold bread to its members at substantial savings. Within four years Schulze-Delitzsch organized the first cooperative credit society by using the cooperative notion to address the needs of credit. This society was called “people’s bank.” By 1864, Raiffeissen had formed the Heddesorf Credit Union to help farmers. By lending money to these farmers, they were able to purchase livestock, equipment, seeds and other farming needs. This concept managed to cross the Atlantic into Canada by 1900 and Alphanse Desjardins organized LaCaisse Populaire de Levis. Desjardins’s desire to establish such an institution came when he realized the outrageous interest that was being charged by loan sharks. His intentions were to provide relief to the working class. In 1909, the first credit union in the United States was formed and called St. Mary’s Cooperative Credit Association. With the assistance of Desjardins, a group of Franco-American Catholics was able to create this credit union. In today’s terms, a credit union is a cooperative financial institution that is owned and controlled by the people who use its services. The owners are called members and these members are usually made up of people who share something in common, such as where they work, live or go to church. Credit unions exist to provide a safe, convenient place for members to save money and to get loans at reasonable rates. Credit unions are able to offer such rates and services because they are a non-profit organization, as opposed to banking institutions which are for-profit and operate for the benefit of their shareholders. Even though credit unions are owned and controlled by their members, they are still closely regulated. The National Credit Union Administration (NCUA), a federal government agency, insures deposits of credit union members at more than 11,000 federal and state-chartered credit unions nationwide. NCUA insures deposits up to $250,000. In August 1984, the World Council of Credit Unions approved the nine International Credit Union Operating Principles that remain a cornerstone in the credit union movement. They are:
These principles are shared
by credit unions around the world and developed with a philosophy
of cooperation. Credit unions are built around the principles of
equality, equity, mutual self-help, and a desire that man has to
do better for himself. |
Open and Voluntary Membership
Freedom
Federal Credit Union |
