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FOR MORE THAN 100 YEARS, CREDIT UNIONS HAVE PROVIDED
FINANCIAL SERVICES TO THEIR MEMBERS IN THE UNITED STATES,
BUT WHAT IS THEIR HISTORY?
HOW DID THEY GET STARTED?
AND WHAT IS NCUA?
BEFORE THE MID-1800S, BANK LOANS WERE A DREAM
FOR MOST AMERICANS.
UNLESS SOMEONE GUARANTEED REPAYMENT, BANKS REFUSED
MOST LOAN REQUESTS.
IF MISFORTUNE STRUCK, FARMERS AND SMALL BUSINESSES
OFTEN WENT UNDER WITH NO HOPE OF RECEIVING EVEN A
MODEST LOAN TO RECOVER.
THE CREDIT UNION MOVEMENT GREW FROM A SIMPLE IDEA:
BY POOLING THEIR SAVINGS AND MAKING LOANS TO NEIGHBORS
AND COWORKERS, PEOPLE COULD ACHIEVE A BETTER STANDARD OF
LIVING FOR THEMSELVES AND OTHERS.
THE CREDIT UNION MOVEMENT BEGAN IN GERMANY.
IN 1848, HERMAN SCHULZE-DELITZSCH SET UP A
CREDIT SOCIETY TO SERVE SHOPKEEPERS AND OTHER URBAN
WORKERS WHO HAD BEEN FORCED TO PAY VERY HIGH INTEREST
RATES CHARGED BY LOCAL LOAN SHARKS.
IN 1864, FREDERICH WILHELM RAIFFEISEN ORGANIZED A
SIMILAR COOPERATIVE FOR FARMERS.
THESE EARLY CREDIT UNIONS BECAME THE MODEL FOR TODAY'S
CREDIT UNIONS IN THE UNITED STATES.
THE KEY PRINCIPLES OF THE MOVEMENT WERE: VOLUNTEERISM,
SELF HELP, ONE MEMBER ONE VOTE, CONSIDERATION OF A
PERSON'S CHARACTER, AS WELL AS NET WORTH.
ALPHONSE DESJARDINS, A CANADIAN JOURNALIST, PROVED
INSTRUMENTAL IN BRINGING THE MOVEMENT TO THE UNITED STATES.
IN 1909, DESJARDINS AND PIERRE JAY, THE
MASSACHUSETTS COMMISSIONER OF BANKS, PLAYED KEY ROLES
IN GETTING THE FIRST LAW FOR ORGANIZING CREDIT UNIONS
ENACTED IN MASSACHUSETTS.
THEY ALSO ASSISTED IN ORGANIZING THE FIRST CREDIT
UNION IN THE UNITED STATES, ST. MARY'S COOPERATIVE
CREDIT ASSOCIATION IN MANCHESTER, NEW HAMPSHIRE.
EDWARD FILENE WHO MANY CONSIDER THE "FATHER"
OF U.S. CREDIT UNIONS AND HIS COLLEAGUE,
ROY BERGENGREN, A POVERTY LAWYER,
BECAME CONVINCED COOPERATIVE CREDIT COULD
WORK IN THE UNITED STATES, A BELIEF THAT WAS REINFORCED
IN A SUBSEQUENT MEETING WITH DESJARDINS.
TOGETHER, FILENE AND BERGENGREN ADVANCED
LEGISLATION TO ISSUE CREDIT UNION CHARTERS IN STATES
ACROSS THE COUNTRY.
IN 1921, THEY ALSO ORGANIZED
THE CREDIT UNION NATIONAL EXTENSION BUREAU.
THE BUREAU'S MAIN GOALS WERE TO ENACT CREDIT UNION LAWS,
FORM NEW CREDIT UNIONS AND PROMOTE THE GENERAL
PHILOSOPHY OF CREDIT UNIONS.
THROUGHOUT THE 1920S, CREDIT UNIONS PROVIDED A SOURCE OF
INEXPENSIVE CREDIT TO PURCHASE PRODUCTS LIKE
AUTOMOBILES AND WASHING MACHINES.
THE POPULARITY OF CREDIT UNIONS GREW BECAUSE
COMMERCIAL BANKS AND SAVINGS INSTITUTIONS GENERALLY
SHOWED LIMITED INTEREST IN OFFERING SUCH CONSUMER LOANS.
BY 1930, 32 STATES HAD ADOPTED CREDIT UNION LAWS
WITH A TOTAL OF 1,100 CREDIT UNIONS.
IN THE AFTERMATH OF THE START OF THE GREAT DEPRESSION
THE TIME HAD COME TO CREATE FEDERAL CREDIT UNIONS.
IN 1934, PRESIDENT FRANKLIN DELANO ROOSEVELT SIGNED THE
FEDERAL CREDIT UNION ACT INTO LAW AUTHORIZING THE
FORMATION OF FEDERALLY CHARTERED CREDIT UNIONS
IN ALL STATES.
PRESIDENT FRANKLIN DELANO ROOSEVELT: It means I am sure
that the masses of the people of the nation firmly believe that
there is great and actual possibility in
an orderly recovery through a well conceived and
actively directed plan of action.
THE PURPOSE OF THE FEDERAL LAW WAS TO MAKE CREDIT
AVAILABLE AND PROMOTE THRIFT THROUGH A NATIONAL SYSTEM OF
NONPROFIT, COOPERATIVE CREDIT UNIONS.
THE FEDERAL CREDIT UNION SECTION WAS ALSO FORMED,
CREATING A NATIONAL SYSTEM TO CHARTER AND SUPERVISE
FEDERAL CREDIT UNIONS.
THE CREDIT UNION SECTION WAS FIRST HOUSED AT THE FARM
CREDIT ADMINISTRATION, UNTIL IT WAS TRANSFERRED TO THE
DEPARTMENT OF AGRICULTURE IN 1939.
THE CREDIT UNION SECTION REMAINED A PART OF DEPT.
OF AGRICULTURE UNTIL MAY 1942, WHEN THE FIRST WAR
POWERS ACT WAS USED TO TRANSFER THE SECTION TO THE
FEDERAL DEPOSIT INSURANCE CORPORATION.
AS THE CREDIT UNION INDUSTRY GREW, THE AGENCY MOVED FROM
THE FEDERAL DEPOSIT INSURANCE CORPORATION TO THE
FEDERAL SECURITY AGENCY, AND THEN FINALLY THE DEPARTMENT
OF HEALTH, EDUCATION AND WELFARE.
AFTER 36 YEARS OF MOVING THE REGULATORY FUNCTION FROM ONE
AGENCY TO ANOTHER, CONGRESS CREATED THE NATIONAL CREDIT
UNION ADMINISTRATION ON MARCH 10, 1970,
AS AN INDEPENDENT AGENCY.
IN 1978, CONGRESS PASSED A LAW TO CREATE THE
THREE-MEMBER BOARD THAT GOVERNS NCUA TODAY.
THE NATIONAL CREDIT UNION SHARE INSURANCE FUND WAS
ALSO FORMED OCTOBER 19,1970 TO INSURE CREDIT UNION DEPOSITS.
IN THE INDEPENDENT CREDIT UNION SPIRIT, THE SHARE
INSURANCE FUND WAS CREATED WITHOUT TAX DOLLARS AND
CAPITALIZED SOLELY BY CREDIT UNIONS.
TODAY, THE SHARE INSURANCE FUND PROTECTS INDIVIDUAL
ACCOUNTS UP TO $250,000 AT ALL FEDERAL CREDIT UNIONS
AND THE OVERWHELMING MAJORITY
OF STATE-CHARTERED CREDIT UNIONS.
NO MEMBER HAS EVER LOST A PENNY OF INSURED DEPOSITS AT
A FEDERALLY INSURED CREDIT UNION.
ON JANUARY 20, 1971, PRESIDENT RICHARD M.
NIXON SIGNED AN EXECUTIVE ORDER ESTABLISHING THE NCUA SEAL.
THE SEAL HAS FOUR UNIQUE DESIGN ELEMENTS THAT
DEMONSTRATE NCUA'S COMMITMENT TO PROTECTING THE
MILLIONS OF AMERICANS WHO DEPEND ON CREDIT UNIONS AND
ENSURING THE SAFETY AND SOUNDNESS OF
THE COOPERATIVE CREDIT SYSTEM.
THE FIRST ELEMENT IS THE ROOF, WHICH SYMBOLIZES
COOPERATIVE PROTECTION SHARED BY THE COMMON-BOND MEMBERS.
THE SECOND ELEMENT IS THE DOOR, WHICH SYMBOLIZES THE
OPPORTUNITY AND PROTECTION OF MEMBERS' SHARES THROUGH
THE SHARE INSURANCE FUND.
THE THIRD ELEMENT IS THE BLUE BACKGROUND DIVIDED
INTO FOUR SECTIONS.
THIS SYMBOLIZES THE MAJOR ADVANTAGES OF CREDIT UNION
MEMBERSHIP: CULTIVATION OF THRIFT, ENCOURAGEMENT TO
SAVE REGULARLY, GRANTING OF LOANS FOR PROVIDENT PURPOSES
AT A REASONABLE INTEREST RATE, AND BUDGET AND
CONSUMER COUNSELING.
THE FINAL ELEMENT IS THE AGENCY'S NAME
SURROUNDING THE SEAL.
THIS SYMBOLIZES THE AGENCY'S COMMITMENT TO PROTECTING THE
COOPERATIVE CREDIT SYSTEM AND ITS MEMBERSHIP.
THE 90'S BROUGHT A STRONG ECONOMIC CLIMATE
CAUSING FEDERALLY INSURED CREDIT UNION MEMBERSHIP TO FLOURISH.
IN 1998 PRESIDENT BILL CLINTON SIGNED LEGISLATION RESTORING
EXPANSION PRIVILEGES AND PROVIDING FOR MULTIPLE
COMMON BOND CREDIT UNIONS.
WHICH ALLOWED CREDIT UNIONS TO INCREASE
FIELD OF MEMBERSHIP AND MERGERS.
IN THE YEARS SINCE THE PASSAGE OF THE FEDERAL
CREDIT UNION ACT, CREDIT UNIONS HAVE WORKED TO OFFER
LOANS AND PROVIDE NEEDED FINANCIAL SERVICES
TO HARDWORKING AMERICANS.
TODAY, FEDERALLY INSURED CREDIT UNIONS HAVE MORE THAN
$1 TRILLION IN ASSETS AND NEARLY 100 MILLION MEMBERS.
NCUA AND ITS MORE THAN 1,000 EMPLOYEES CONTINUE TO WORK
TO PROTECT AND ENHANCE A CREDIT UNION SYSTEM THAT IS
SAFE, SOUND, AND SECURE