HistoryThe history of credit unions began in 1844, with a group of weavers in Rochdale, England, who established the Rochdale Society of Equitable Pioneers. They sold shares to members to raise the capital necessary to buy goods at lower than retail prices, and then sold the goods at a savings to members. In doing so, they became the first credit union. The movement then spread to Germany in 1850, Canada in 1901, and the United States in 1908.
1844A group of weavers in Rochdale, England, established the Rochdale Society of Equitable Pioneers. They are credited with establishing the first cooperative. They sold shares to members to raise the capital necessary to buy goods at lower than retail prices, and then sold the goods at a savings to members.
1852 and 1864Hermann Schulze—Delitzsch and Friedrich Wilhelm Raiffeisen created the first true credit unions in Germany. In 1849, Raiffeisen founded a credit society in Flammersfeld, but it depended on the charity of wealthy men for its support. In 1864, Raiffeisen organized a new credit union along principles that are still fundamental today.
These German credit societies—along with similar institutions that Luigi Luzzatti founded in Italy—were the forerunners of today's large cooperative "banks" in Europe.
1909Pierre Jay, the Massachusetts banking commissioner, and Edward A. Filene, a Boston merchant, are credited with establishing the credit union movement in the United States. Massachusetts enacted the first state credit union act that year.
1921Filene created the Credit Union National Extension Bureau, to work towards establishing effective credit union laws in all states and at the federal level. He poured more than $1 million of his own money into the project, and hired a Massachusetts attorney, Roy F. Bergengren, to support the Bureau's efforts. When Bergengren began his efforts there were only 199 U.S. credit unions. By 1925, 15 states had passed credit union laws; 419 credit unions were serving 108,000 members.
U.S. credit union founders (left to right) Edward A. Filene and Roy F. Bergengren with Claude R. Orchard
1934The Federal Credit Union Act is signed and Federal Credit Union Division is placed within the Farm Credit Administration. The act permitted credit unions to be organized anywhere in the United States. The passage of this landmark legislation created a choice for credit unions. They could incorporate under either state or federal law. This system of dual chartering persists to the present day.
August 1934Claude R. Orchard assumes leadership of federal credit union supervision, a post he will hold for 19 years.
May 9, 1935Claude R. Orchard, Director, Credit Union Section, Farm Credit Adminstration signs a permit to operate for the Federal Reserve Board (FRB) Federal Credit Union, issuing Charter Number 320. Read the official correspondence (PDF), dated March 4 and March 5, 1935.
1942Federal credit union supervision is transferred to the Federal Deposit Insurance Corporation.
1948The renamed Bureau of Federal Credit Unions finds a new home at the Federal Security Administration.
1953J. Dean Gannon is named director of the Bureau of Federal Credit Unions as it moves to the new Department of Health, Education, and Welfare.
1970General Herman Nickerson, Jr., heads the now independent National Credit Union Administration and the newly created National Credit Union Share Insurance Fund.
1970'sThe 1970s brought major changes in the products offered by financial institutions and credit unions found they needed to expand their services. In 1977, legislation expanded services to credit union members, including share certificates and mortgage lending. The 1970s was a decade of tremendous growth in credit unions. The number of credit union members more than doubled to more than 43 million, and credit union assets tripled to more than $65 billion.
Since the 1970s, many smaller credit unions have merged into larger ones that offer a wider range of services. Although this has caused the number of credit unions to decline, membership continued—and continues—to climb. Today, nearly 85 million Americans are credit union members.