Chapter Five: In Savings We Trust: Credit Unions and Thrift (Clifford N. Rosenthal)

The first credit union that was established was created at the hands of Alphonse and Dorimene Desjardins in Quebec. With their neighbors, they raised $26.40 and founded a caisse populaire. They went on to establish a children's "penny savings" program that moved into schools. In North America, the St. Mary's Bank was formed in New Hampshire with the help of Monsignor Hevey of St. Mary's Church. Another key figure in the credit union movement was the capitalist/philanthropist best known for Filene's Bargain Basement: Edward Filene. He traveled the country establishing credit unions and working with people to legal enable the creation of the credit unions. This was accomplished in 1934 when a federal law passed. During the Great Depression, thrift became a necessity rather than a philosophy; there was simply no other way to survive life. People who organized credit unions did so with passion. People like Dora Maxwell and Louise Herring would travel, bring people together, educate them, and aid them in the chartering of credit unions. Race was restrictive of who could join credit unions, so African Americans had to form their own, which went on to help them for over sixty years to buy farms, indoor plumming, businesses, etc... Faith based credit unions were very important in this respect. The 1970s marked dramatic changes for credit unions. The National Credit Union Administration was established and imposed government supervision and regulationns. This caused the credit union movement to expand because the savings were now backed by the U.S. government. The number of credit unions doubled during the 1970s. Thrift was crucial to the credit union movement. Savings were not viewed as self-denial, but as self-help. The savings would provide for the individual during unwelcome changes such as job layoffs, medical bills, etc... The credit unions allowed saving to be systematic and regular. For low-income communities, there are community develoment credit unions. The pool the savings of people whos accounts are too small to interest a bank. Today, the savings rate in the U.S. has declined until it has reached negative numbers in 2006. The credit union movement as of 2007 involved 8,410 institutions with assets of over $757 billion. The credit union movement is important because it promotes human dignity, independence, and self-sufficiency. They promise hope for the country.