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Credit unions are everywhere, but you might be wondering what credit unions are and how they originated. Have no fear! This post will answer your burning questions.

What is a credit union?

Simply put, credit unions are not-for-profit cooperative financial institutions owned by members. You must apply to be a member at a credit union and there are eligibility requirements you must meet, such as living in a certain area or working for a specific employer.

A credit union’s focus is to better serve their members rather than trying to earn a profit. They also typically have lower loan rates, better savings rates and reduced fees.

What are some of the highlights of credit union history?

Friedrich Raiffeisen established the first credit union in 1864 in southern Germany. His idea was for all members of the community to pool their resources together so it could be easier for those who needed loans to get them. It would be 45 years later that the United States would see its first credit union, St. Mary’s Cooperative Credit Association, open its doors in Manchester, New Hampshire.

In 1921, the Credit Union National Extension Bureau was established, focusing on creating new credit unions, enacting state laws to charter credit unions and spreading the philosophy of credit unions. Then in 1934, during the depths of the Great Depression, President Franklin D. Roosevelt signed the Federal Credit Union Act into law. This helped make credit available to more Americans. 1934 is also the year that 1st MidAmerica Credit Union was chartered.

The National Credit Union Administration was formed in 1970 by Congress. The National Credit Union Share Insurance Fund was also established, which federally insured deposits at credit unions.

What does the future hold for credit unions?

Credit unions have adopted new technology to make banking easier and more convenient for its members. Online account opening, mobile check deposit and video banking are just a few examples of how credit unions are rolling with the times. Credit unions will continue to search for new and innovative ways to help its members, and continue to put its members first, always.