Page 11 - Book4E

CHAPTER 1
History of Credit Unions
The idea of group savings that is discussed in Volume 3 formed the foundation for the establishment of credit unions. In the beginning, the idea was simple—people pooled their money and then used it to make loans to each other. The groups were formed, as credit unions are today, by individuals with a common
bond such as a trade, a church, a profes- sional association, and so forth. Three principles were defined as a guide for decision-making and operations:
1. Only people who were members of the credit union could borrow from it.
2. Loans were given only for wise and profitable needs.
3. An individual’s desire to pay back the loan was of greater importance than his or her ability to pay. (Electronic accounting has taken this personal perspective out of the picture.)
Lending cooperatives began in the 1800s, the first successful ones by a group of workers in England and a group of farmers in Germany. Developed to help the low-income individual battle high interest rates, these forerunners of the credit union offered investment and loan opportunities to the men and women whom banks and other financial institutions were not interested in having as customers.
Drive-in banks were estab- lished so most of the cars today could see their real owners.
—E. Joseph Crossman
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