1951 - Quote on the Purpose of the Credit Union "Common Bond"

The following quote is excerpted from Richard Y. Giles' 1951 history Credit For the Millions: The Story of Credit Unions, which bears the endorsement of the Credit Union National Association (CUNA):

The purpose of limiting membership is to create a little community in which people know each other well enough so that they can lend money to each other on character without paid investigators, collections agents, and the usual paraphernalia of the small loan business. Democratic control of the credit union is safeguarded by the fact that each member has only one vote, thus avoiding domination by a few large investors. This, too, helps make it intimate.

There are credit unions in large industrial plants with thousands of members and equally large credit unions serving municipal employees in big cities. Here the intimacy of the membership does not amount to much. Office space is rented, real estate taxes are paid, and paid employees may number several score. Still the credit union is able to charge the same low interest rates, pay reasonable dividends on saving, and provide insurance on loans and shares, simply because despite its size the credit union is motivated by the desire to serve its members rather than make a profit from them. The directors and officers continue to serve as volunteers out of the public spirit. Among the elected officers only the treasurer's work is paid. (25)

Book Review: The Black Church Credit Union by Perry E. Henderson, Jr.

Written by an African-American Baptist pastor for his Doctor of Ministry dissertation at the end of the 1980s, The Black Church Credit Union is an incredibly rich and fascinating source. Its author, Perry E. Henderson, Jr., was the latest in a long lineage of prominent black clergymen that stretched back to the Civil war, and his father was instrumental in launching the church’s credit union. Motivated in part by the fact that the institution was put on probation for a high numbers of defaulting loans in the catastrophic economic environment of downtown Dayton, Ohio in the early 1980s, the book is structured around a twelve week long “consumer education workshop” that Henderson designed for his capstone project.

The book begins by providing an overview of the historical forces, such as the experiences of slavery and racism, that uniquely shaped the communities that congregated in black churches. African Americans are unique, he argues (following a line of thinking that stretches back to W.E.B. Dubois), in that they have been both “forbidden to be African and never allowed to be American,” (14) so a great deal of their sense of belonging and community has been provided by their churches. As a result, the centrality and influence of those churches means creates an imperative that they take a leading role in facilitating the healing and advancement of their communities, for which task the credit union model is eminently suited. He then goes on to make arguments in favor of the credit union model within the frameworks of the Christian concept of "Stewardship" and traditional African communalism.

As a result, the curriculum of Henderson’s workshop (a detailed outline of which serves as the book’s conclusion) goes far beyond the standard sorts of courses that many credit unions offer to their members. In addition to the predictable discussions of “budgeting” and “applying for a job,” participants delved into topics such as Black Theology, the history and practice of the credit union model, and “One Covenant Under God Sharing Economic Resources.” Drawing on the complex history and identity of his church's community, the course not only aims to make its participants more informed consumers (and thus better credit risks), but also to make them more knowledgeable and committed members of the community that forms the credit union's common bond.

This sort of symbiotic relationship between the credit union and its founding community, in which strengthening one strengthens the other, is characteristic of what historian Ian MacPherson has referred to as the "populist culture" in credit unions, which is interesting to see in the context of the late 1980s. The number of credit unions in the United States peaked in 1969, and the movement's further growth came in the form of consolidation, as credit unions merged to achieve economies of scale, which had the unintended consequence of diluting their attachments to their founding communities.

As such, Henderson's promotion of populist credit unionism during a period of its precipitous decline is particularly interesting. Although a great deal more study is needed on the topic of African American credit unionism, the book hints at the possibility that the developmental trajectory of African American credit unionism may have differed substantially from that of the white-dominated movement. As David Beito notes in From Mutual Aid to the Welfare State, while white fraternal mutual aid organizations were largely crowded out by the welfare state starting in the 1930s, the racist socio-economic order meant that black fraternal orders and churches were taking an almost exclusive role in meeting the needs of African Americans in the South well into the 1960s. Could a similar dynamic have been at play in the credit union world, delaying the onset of managerial domination that had pretty much consolidated itself in the main-line credit union movement by the early 1990s?

Despite its brevity (weighing in at a mere 118 pages), The Black Church Credit Union is an incredibly rich source. Bouncing between discussions of the Deuteronomic Covenant, African communalism, credit union history, the historical roots of black theology, and economics, Henderson offers the reader a fascinating window into a branch of the credit union movement that is too-often omitted from the official histories. Not only should it be considered essential reading for those interested in further investigation of the history of African American credit unionism, but it also offers useful insights to anyone interested in cultivating a deeper understanding of the dynamics "populist" credit unionism in any context.