Alphonse Desjardins founded the first credit union in North America, the Caisse Populaire de Lévis in 1901 in Quebec with a 10-cent deposit. Desjardins wanted to provide ­affordable credit to working class families, who were at the mercy of loan sharks that charged outrageous interest. In 1908, Desjardins helped found the first credit union in the United States, St. Mary's ­Cooperative Credit Association in Manchester, N.H.

The American movement, however, really started in Massachusetts, when Pierre Jay, a banker and grandson of John Jay, the first Chief Justice of the Supreme Court, and Edward Albert Filene pushed the enabling legislation in Massachusetts. The Massachusetts Credit Union Act became law in 1909. It served as a basis for other state credit union laws and the Federal Credit Union Act of 1934. Filene personally displayed the values underpinning the credit union industry. He is known for building the Filene's department store chain, but moreover, he was an enlightened employer believing that his employees ­determined his success more than any other factor. He took care of his workers, mostly ­women, ­offering them free health care, hourly breaks and meals. Filene encountered rural cooperative banks, many started by women while traveling in Calcutta, India on 1907. He ­realized that these types of cooperatives could help ordinary American workers ­access loans without falling victim to usury and allow them to save for the future.

 In 1920, Filene hired Roy F. Bergengren, who had been a poverty lawyer, to manage the Massachusetts Credit Union Association, where his promotion of credit unions led to 19 new ones within a year. Given this success, Filene founded the Credit Union National Extension Bureau in 1921 and hired Bergengren to run it. Its ambitious mission was to create effective credit union laws in all states and at the federal level. Filene contributed over $1 million to this effort.

Bergengren travelled the country appearing before state legislators and recruiting volunteer organizers. In his passionate speeches, he would state, “The real job of a credit union is to prove, in modest measure, the practicality of the brotherhood of man.” When Bergengren began his efforts in 1921, there were only 199 U.S. credit unions. By 1925, 15 states had passed credit union laws, and 419 ­credit unions were ­serving 108,000 members. By 1930, 32 states had adopted legislation with a total 1,100 credit unions, and by 1935, 39 states had passed enabling legislation and 3,372 credit unions were serving 641,800 members.

The effort culminated with Franklin Roosevelt signing the Federal Credit Union Act on June 26, 1934, creating the national system to charter and to supervise federal credit unions. Credit unions have been a shining example of quality service, fair prices, community outreach and ethical dealing. These are the values that benefit our communities now and have since the industry's ­inception in Germany 165 years ago.

Stuart R. Levine is chairman/CEO of Stuart Levine & Associates
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