Why the “I” in ICU Day?
It’s fitting that we in the “land of opportunity” choose to put the word “international” at the front of our annual celebration of the credit union movement. A quick history lesson reveals that the U.S. credit union movement was hatched from an idea cultivated in Europe. And, as it turns out, our country just happens to be the biggest credit union success story. We’ve become the model for democratically controlled financial institutions.
Not Made in the U.S.A.
Credit unions are an import. Although they seem as American as apple pie, today’s credit unions are based on the same principles and structure as early German credit unions, the country where the movement first took root. Their attributes included:
- Democratic governance
- One vote per member
- An elected board of directors
- Volunteer based
It wasn’t until about half a century later that the credit union movement reached the U.S. and began with St. Mary’s Cooperative Credit Association in Manchester, New Hampshire.
Golden-Arches-Like Growth
I hope no one is offended by comparing credit unions to McDonald’s. It’s not in praise of the Big Mac or supersize fries. Instead, it’s merely to illustrate the similar path of two German imports: credit unions and the hamburger.
Timing is everything, but you need a visionary. The McDonald brothers had a soft start in 1937 with their 10¢ hamburgers and all-you-can-drink o.j., experiencing only modest growth through the forties. It wasn’t until the 1950s that Ray Kroc voluntarily began establishing franchises nationwide. Food that was inexpensive and fast fit the new convenience need of the steadily growing number of two-earner families. The phenomenal growth in the ’60s and ’70s was fueled by suburbanization and the dream of two cars in every driveway.
Take the McDonald’s story and change the dates to the 30s and the 50s and the names to Filene, Bergengren, Maxwell, and Herring and you have the credit union success story in the U.S.
Credit unions were spreading throughout the country. During the Great Depression, they provided financial support to struggling Americans. In 1934, President Franklin Roosevelt signed the FCU Act, which authorized federally chartered credit unions in every state. With an emphasis on thrift and sound financial practices, the credit union movement expanded rapidly in the next decades. During the ’70s alone, assets in credit unions tripled.
Open for Breakfast
McDonald’s didn’t originally offer pancakes and Egg McMuffins, and credit unions couldn’t always meet all financial needs.
Although credit unions have reinvented themselves (share drafts, credit cards, online access), they have stayed true to their principles, opening branches in neighborhoods abandoned by the for-profit banking industry, providing ongoing financial education to help members better use their money, and supporting local, community, national, and international causes.
Still Growing
While the U.S. may have reached its saturation point with the Golden Arches, McDonald’s continues to grow overseas.
Likewise, the credit union movement is being fueled both here (as credit unions reach out to extend membership to the newest waves of immigrants and their families) and abroad (especially in Africa). Worldwide, credit unions give members life-changing opportunities for such ventures as starting small businesses, building family homes, and educating their children. In some countries, members encounter their first taste of democratic decision-making through their member-owned credit unions.
Each of us working in the credit union system can say we are a part of something larger that contributes to community growth, financial development, and political action all over the world. That’s pretty amazing and certainly worth celebrating.
Join the conversation at #ICUDay and learn more at cuna.org/icuday.
In 2014, Joanne celebrated 20 years in the credit union system. She currently coordinates ICU Day and Youth Week. Contact her with your questions at jsepich@cuna.coop.
