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You may have already heard about the great benefits of using credit unions over big banks--such as lower interest rates and fewer fees--but did you know these interesting facts about the community-focused institutions? 1. These financial institutions originated in Europe after German economist Herman Schulze-Delitzsch, and German mayor Freidrich Wilhelm Raiffeisen observed the torment of farmers who were ruined by drought and indebted to unscrupulous loan sharks. They envisioned loans specifically for those without much collateral, like farmers. 2. More than 70 percent of Ireland's population belongs to credit unions. In America and Canada the figure is around 43%. The institutions are also growing in numbers in other parts of the world. 3. 32 states had adopted laws to govern these financial institutions by 1930. There were about 1,100 in the United States at the time. 4. Interestingly, Japan had a jump on the concept of credit unions--they were developed in the early 19th century, during the country's time of isolation from the world, by Ninomiya Sontoku, an agrarian reformer and economist. These village financial institutions were known as gojoko, and each member could borrow money interest-free for 100 days. In case of default, the entire membership took on the cost. 5. The cooperative movement, which focuses on self-governed associations of members that work together to achieve a goal, was very popular in 19th century Europe. It became the basis for the lending institutions. The first cooperative, called The Rochdale Society of Equitable Pioneers, was founded in 1844 by a group of workers in Rochdale, England. This group pooled money from each member to open a co-op store that sold flour, butter, oatmeal, sugar, and candles. 6. The first of these lending institutions in the United States was Saint Mary's Cooperative Credit Association in Manchester, New Hampshire. Now named St. Mary's Bank, this financial institution was founded by French-speaking immigrants from the Maritime Provinces of Canada. Monsignor Pierre Hevey, St. Marie's church minister, was also instrumental in the founding of the union. 7. The legal structure for credit unions did not exist until 1979 in the UK. Some of the early institutions registered under the Industrial and Provident Societies Act, and some under the Companies Act 8. In 1984, the U.S. Postal Service released a stamp commemorating the 50th anniversary of the FCU Act, which was signed by President Theodore Roosevelt in 1934. The act's 75th anniversary was in 2009. 9. Because early loans were aimed at providing money for people who didn't have much collateral, they were often guaranteed with unusual forms of security, such as family photographs, coin collections, or just the borrower's character. These things did not have value, but they were valuable to the borrower. Looking for credit unions? Saginaw, MI residents can visit https://www.wildfirecu.org to learn more.
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