Tuesday, May 10, 2011

Book Review: CUNA Emerges by Roy F. Bergengren

Written shortly after the formation of the Credit Union National Association, CUNA Emerges, by Roy F. Bergengren, is a truly essential text for students of the early credit union movement. Intended as an introduction to the theory and practice of credit unionism, Bergengren's book offers a comprehensive window into the ideas and general practices that characterized the movement in the mid-1930s. Along the way, he offers numerous insights into the nature of the philosophy that underpinned credit unionism, as well as observations on issues that the movement has continued to wrestle with to this day.

First and foremost, this book is of truly incomparable value to anyone doing primary research on early American credit unions (i.e., pre-1970s); in fact, for anyone considering such a project, I would strongly recommend consulting it before digging into the archives. Without the benefit of this book, my earliest archival work had a steep learning curve, as I only gradually, and in a piecemeal fashion, came to understand the full significance of the musty documents that had been excavated from a credit union's supply cabinet.

Such confusion and extra work can be easily avoided, however, since CUNA Emerges was intended as a step-by-step guide to starting and operating an early credit union. As such, the book contains a section on virtually every important document that you will find in old credit union papers which not only discusses its function, but also reproduces sample versions. Additionally, Bergengren also goes into detail as to the functions, expectations, and challenges of the different roles (board member, treasurer, credit committee member, etc.) within the organization. Thus, instead of trying to determine the boundaries of different positions on an ad hoc basis, CUNA Emerges helps the credit union historian to enter the archive with a clear sense of what it meant to be a credit union officer or member in 1935.

In addition to being an invaluable resource to folks doing primary research on individual credit unions, the book also contains numerous expressions of the philosophical and ideological orientation of the credit union movement at the time. In addition to quoting his forbears, such as Alphonse Desjardins, at length in the early chapters, Bergengren regularly intersperses his pearls of wisdom (often helpfully italicized) amidst CUNA Emerges' dry, technical sections. For instance, in discussing of the nature of the role of the board member, he observes that "[t]here is no true compensation for the trials and tribulations incidental to passing through this span of years called 'life' except as one writes his own immortality in service, the good results of which live after him."1 Such expressions of the values of credit unionism are incredibly helpful to the task of understanding what motivated the hundreds of thousands of dedicated volunteers who built the credit union movement in its first decades.

Finally, some of the issues that Bergengren addresses in CUNA Emerges are still highly relevant to the contemporary movement, and his views on them add an interesting historical dimension to current debates. One such issue can be found in the role of the common bond in credit unionism. In the early years of the movement, the membership group of a credit union was required to have a strong shared connection to each other, which could take the form of a workplace, a church congregation, or a tight-knit community. However, over time, and for various reasons that are beyond the scope of this essay, the common bond requirement was progressively loosened, to the point where, for instance, anyone who lives or works in the state of Vermont is eligible for membership in the VSECU.

In CUNA Emerges, Bergengren demonstrates that early credit unionists were very much aware of the possibilities of expanded common bonds. However, instead of viewing tight requirements as a constraint on the movement's growth, he believed that they were essential. In discussing community credit unions, he notes that "[t]he [community credit union] plan will work well if the community is not so large that the residents of it have no group consciousness. It would work well in my town of Wenham which has about 900 residents, living without much moving in and out in a town which has a relatively small area. It would work very badly (as we have often proven to our sorrow) where the limitations were the city limits of a big city. I would advise against a community credit union in any community of more than 4000 inhabitants."2 Though many (perhaps unforeseeable) developments have taken place since Bergengren wrote those words, his concerns highlight the importance of a subjective sense of community which has too often been lost by many institutions in recent years.

Another contemporary issue about which Bergengren had something to say in 1935 concerns the agency conflict between net-savers (who want a higher dividend) and net-borrowers (who want cheaper credit). Lucidly explained in terms of modern economic theory in the second chapter of Cooperative Financial Institutions: Issues in Governance, Regulation, and Supervision, CUNA Emerges demonstrates that the problem was also a concern of the early movement. However, Bergengren believed that the credit union model collapsed those two identities into one. As he puts it, "[a] credit union is not composed of two groups--a group of thrifty savers and a group of thriftless borrowers; it is composed of one group, all of whom are members and systematic savers and some of whom borrow from time to time for legitimate purposes."3 As such, when it comes to determining how to distribute the organization's surplus, the decision was clearly indicated for Bergengren by the organization's name: "a credit union is a credit union--a union of its members for the purpose of making it possible for them to take care of their own short-term credit problems at reasonable rates. It is very definitely not an investment union."4

In sum, CUNA Emerges is an important read for anyone interested in credit union history in general, and is an absolutely vital guide for folks looking to do original research on individual institutions. Well written and containing both funny and startlingly timely moments and observations, Bergengren's book is an invaluable window into the character and practice of the credit union movement as it, in his words, "reached its majority."5


1Bergengren, 146.
2Bergengren, 75. Also see 37-8.
3Bergengren, 45.
4Bergengren, 36.
5Bergengren, xi.


  1. Fascinating, I'll have to find a copy. I personally find the following quote to be very interesting especially in today's CU world, "[t]he [community credit union] plan will work well if the community is not so large that the residents of it have no group consciousness."

    Have you read 'Speaking of Change'? It's a collection of Ed Filene's writings and speeches that you might find useful. I believe the Filene Research Institute published the book in 2008.

  2. I've yet to read 'Speaking of Change,' but its definitely on the list. The more learned about Filene, the more fascinating I find him. There's a particularly interesting article that was published in the American Journal of Economics and Sociology which compares him the the 19th century British philanthropic utopian industrialist Robert Owen which is very insightful.

    Additionally, I agree that Bergengren's thoughts on community should be reflected on by the modern movement. Two related articles, the first by me, the second by another CU blogger: