On October 16th, we celebrate International Credit Union Day - a time to recognize the vital role credit unions play in supporting their communities and helping individuals achieve their financial goals. For 77 years, this day has honored credit unions for their commitment to people over profit, offering personalized service, financial empowerment, and genuine responsiveness to members' needs. As we mark the milestone anniversary, we acknowledge the impact credit unions continue to have across the country in advancing financial literacy, inclusion, and building stronger, more resilient communities.
History of Credit Unions
The idea of credit unions first began in Germany during the 1850s, where early models were created to provide various financial services to communities that were excluded from traditional banking systems. Pioneers such as Friedrich Willhelm Raiffeisen and Hermann Schulze-Delitzsch were a key part of creating cooperative financial institutions that accentuated self-help and community collaboration. These institutions went against the practice of usury and aimed to provide affordable loans to rural and urban populations.
In North America, Alphonse Desjardins founded the first credit union in Canada called Caisse Populaire de Lévis in 1900. Consequently, this model inspired the first credit union in the United States, St. Mary's Cooperative Credit Association, in 1909, located in Manchester, New Hampshire. Desjardins sparked innovative groundwork for credit unions in America, further pushing for cooperative banking among local communities.
Credit Unions began to flourish with the Federal Credit Union Act of 1934, which provided a legal framework for federal credit unions and granted access to operate across state lines. This legislation was a key component in expanding credit unions and further ensuring their reliability during economic hardships, such as the Great Depression.
During the 20th Century, the seeds of credit unions blossomed from small, community-focused organizations into significant figures in the financial landscape, allowing them to serve millions of members. Credit unions became known for prioritizing their members by offering lower fees and better interest rates compared to traditional banks. Additionally, industrial unions contributed to the establishment of credit unions fitted for the financial needs of workers in various industries.
Credit Unions and Banks - The Difference
You may be wondering what makes a credit union stand out compared to a bank. While they're both financial institutions, there are various components that set them apart. For starters, credit unions are non-profit institutions owned by their members, while banks are for-profit institutions owned by shareholders. This leads to a difference in services, fees, and interest rates. Since credit unions are owned by members, any profits are returned to members through lower fees and better interest rates on loans and savings accounts. Conversely, since banks are for-profit, either privately owned or publicly traded, they aim to maximize profits for their shareholders. This can lead to higher fees and lower interest rates on savings accounts.
Furthermore, credit unions often emphasize community involvement and customer service, leading to a more personalized financial experience. Banks may also engage in community efforts, but their primary focus remains on profitability and shareholder returns.
How to Celebrate International Credit Union Day
If you want to join the fun and celebrate International Credit Union Day, there are several ways to contribute your support:
1. Talk about your credit union experience: Share your stories and successes you've had with your credit union through word of mouth, social media, or online reviews. This will inspire others to explore what financial options they have.
2. Promote financial literacy: Support financial education through sharing knowledge and resources with others, especially the youth, to empower them with financial skills.
3. Join KCC on October 16th at your favorite branch for Credit Union Day and grab some giveaway items and refreshments! We invite everyone to join us for this celebration, as it recognizes our team for their dedication as well as our members who inspire us to strive for community cooperation and financial well-being every day. We hope to see you there!
Happy International Credit Union Day!
« Return to "Blog"
open
apply
submit
calculate