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.

A Few Updates

As I've been recently busting my butt getting Cooperative Vermont (a cross-sector initiative) off the ground, Credit Union History has been back-burnered as of late. However, in the last few months there have been some interesting credit union history related developments, so I figured I'd throw out a few quick updates:

1. Paul Thompson's new book on recent credit union history is out! I reviewed the manuscript a little while back, and the final product is a solid work of history that should be on the reading list of every American credit union board member and employee.
2. Jeff Hardin has started a project looking into the history of African American credit unionism in North Carolina. Check out this CUiNsight post for more info.
3. "The American Credit Union Industry Still Embodies Its Founding Values" by Stuart Levine is an interesting essay that draws a strong connection between an understanding of CU history and the movement's present values.

As for this site, one of my goals for the summer is to really delve into the pile of old issues of the Credit Union Bridge that have been occupying my book-shelf, so stay tuned for any gems that might turn up... :)

Time Banks: A Powerful Tool for Building Social Capital in Credit Unions and Cooperatives?

As I've discussed previously in greater detail, the strength of the sense of community that members experience in their credit union/co-op has a huge impact on their level of identification with the organization. This level is important because, the more that members internalize the fact that they are member-owners of an organization rather than its customers, the more their skills, energy, and relationships can be mobilized in support of their co-op's goals and interests. For example, a member who barely identifies with his or her co-op will be much less likely to, say, contact his or her Congressional delegation to encourage them to support Member Business Lending legislation than a member who has a clear sense of ownership of, and belonging to, the organization.

As such, I believe that one of the most important challenges facing contemporary credit unionists is the development of methods by which the collapse in the social capital that accompanied the post-1969 trend of credit union professionalization can be reversed. In the above-linked essay I proposed one strategy: democratizing community giving. In this piece I will propose a second, parallel opportunity: time banking (see the below video for a brief introduction to the concept).

I made this connection at the Vermont New Economy Conference last week, when, after the Cooperative Vermont convergence, I decided on a whim to attend the session on time banking. I'd heard of the concept before, but had never really given the model much thought. Happily, the presentation and subsequent discussion were extremely illuminating, and it quickly became apparent to me that time banks could be a powerful tool for strengthening the web of members' social inter-relations (i.e., social capital) within a cooperative organization.

Practically, a co-op/credit union time bank could work as follows. Using one of several existing open-source platforms, the organization would set up a time bank on a section of its website and create accounts for all of its members. Members would then have the opportunity to post both services they'd be willing to perform, as well as things they need done, and they would be able to use the site to keep track of how many hours they'd given to, and received from, others. As all of the participants would be co-op/credit union members and the system's infrastructure would be administered by the institution, every helping act facilitated by the time-bank would thus serve to increase the salience of the participating members' relationship with their co-op, while also increasing the organization's overall social capital by fostering new intra-membership relationships that had not previously existed.

In any case, the proof will be in the pudding; at the end of the session, a group of folks from my town got together and decided to develop a proposal to attempt to implement such a system through one of our local cooperative organizations. We'll be pitching it to the board on the 17th, so keep your eye out for updates as the project progresses!

Artifact: New Jersey Credit Union League "Little Man" Glass

Knowing my love of all things credit union, my partner recently went on Etsy to find me a birthday present. After a bit of browsing, she stumbled upon a New Jersey Credit Union League glass that some crafty person had turned into a scented candle. Probably made in the 1960s or before (since the "Little Man with the Umbrella" was retired as an official logo in the middle of that decade), the glass is a nifty window into the past, and I'm looking forward to using it to toast the memory of Bergengren once the candle is kaput...

North America's First Credit Union: Reflections on a Visit to the Maison Alphonse Desjardins

Ever since I first became interested in the history of the credit union movement, I've wanted to visit Levis, a suburb of Quebec City and home of the very first credit union in North America. Founded by Alphonse Desjardins in his home as the Caisse Populaire de Levis in 1900, the model pioneered in Quebec quickly spread and was instrumental in the establishment of the American movement.

However, in American historiography, the French Canadian element of the credit union story is treated as something of a prologue, and tends to conclude with Desjardins' meeting with, and inspiration of, Edward Filene in 1908. After that moment, the focus of the dominant narrative shifts to the work of the Filene / Bergengren team in the United States. While their story is vitally important to understanding the nature of credit unionism in the US, I've been quite curious to learn more about the work, life, and legacy of Desjardins.

Happily, I got just that chance during a recent family vacation to Quebec City, when I was able to convince my parents and partner (with promises of micro-brews and chocolate) to accompany me on a ferry ride across the St. Lawrence to Levis. The town itself, situated at the top of a steep cliff, has long been a working-class suburb of the provincial capital and, after climbing the long set of stairs leading up from the ferry dock, we headed towards the steeple of the Catholic church.

The stately white house's location at the edge of the church green was clearly convenient for members whose common bond was the parish, and the building is now prominently marked with a sign identifying it as "Maison Alphonse Desjardin." When we arrived, we were greeted at the door by an enthusiastic and knowledgeable bi-lingual docent named Patrick Lafrance, who took us on the (free) tour as soon as we arrived.

The house itself has been restored, thanks to the financial support of the Desjardins Caisse Populaire federation, to how it would have looked in 1906, and our guide mixed a great deal of fascinating Quebec social history into the tour, including a discussion of the distribution of electric lamps in the house (electricity was put first in rooms that could be seen from the street) and the black cross hanging in the kitchen (a symbol of the Catholic temperance movement, of which Desjardins was a supporter). Many of the artifacts in the house were original, and in each room our guide filled us in on the origins, functions, and social meaning of a great diversity of items, from cutlery to furniture to wallpaper.

The First CU Office!

After touring the other rooms in the house, through which the social, economic, and cultural context of North America's first credit union was established, our final stop was the small office out of which Desjardins and his wife, Dorimene, ran the Caisse Populaire de Levis in its formative years. Our guide made a point to emphasize how critical Dorimene was to its success, since Alphonse's job as the French language reporter for the Canadian Parliament meant he lived six months out of the year in Ottawa. As a result, Dorimene was primarily responsible for the successful operation of the Caisse for long periods of time, and she is now remembered as its co-founder.

Toking for Economic Democracy?

On the original desk sits the original ledger-book, a handsome, leather-bound volume that covers the years 1901-1908. Also heavily present in the office (and scattered around other parts of the house as well) are numerous pipes. According to our guide, it is believed that Desjardins bought himself a pipe for each Caisse he helped successfully found, which was well in excess of one hundred. Many of the books in the space are also original, although his correspondence has been moved to the archives of the Desjardins federation (which is also in Levis).

After thanking Patrick, purchasing pretty much everything available in the gift shop, and getting some amazing chocolate-dipped ice-cream at Chocolat Favoris, a shop a couple blocks from the museum, we hopped on the ferry and returned to Quebec City. However, leaving Levis did not mean our encounters with Desjardins' legacy were over; rather, unlike the American credit union pioneers, he has achieved a significant and recognizable place in Quebec's historical consciousness.

Fancy seeing you here...

The first real indication of this came as we walked through the streets of the old city from the Ferry back to our hotel. En route, we encountered an enormous, multi-story mural portraying historically important people from various eras on the streets of Quebec. It was quite the spectacle, so we stopped for a few minutes to take it in. As we examined it, we suddenly noticed a familiar face, and went over to look at the guide. Sure enough, Alphonse Desjardins was standing next to Samuel de Champlain, the French explorer widely credited as one of the founders of Quebec. In an American context, this would be like seeing Edward Filene or Roy Bergengren portrayed in a mural as a figure of equivalent importance to Lewis and Clark or George Washington.

This sense of the prominent place of Desjardins and the caisses populaires in the historical identity of Quebec was further confirmed the following day when we visited the Quebec history exhibit at the Museum of Civilization. In an exhibit whose subject stretched from the indigenous pre-history of the First Nations to the recent near secession from Canada, fully half of the display on the development of banking in Quebec was focused on the caisse populaire movement (including an original teller counter, sample checks, passbooks, ledgers, etc.), and visitors could listen to an audio version of one of Desjardins' speeches.

While I learned a great deal about the history of the Quebec credit union movement and Desjardins in particular, the biggest revelation to me from my journey was the weight given to the man and movement in the popular understanding of the province's history. In the United States, credit union history can hardly command a footnote in obscure academic journals, while, in Quebec, the movement's founder can be found painted larger than life in public murals and is well featured in the province's most prestigious history museum. Why the difference?

While there is much in-depth comparative work to be done, I think the relative historical prominence of the two societies' cooperative banking movements can be attributed to two major factors. First, the caisse populaire movement in Quebec was given nationalist meaning by many Francophone people itching under the domination of Anglophones. As the first Canadian banks were owned by the English elite and tended to put those interests above the interests of more working-class Francophone Quebecers, the caisses populaires were not simply ways for working class people to obtain credit, but they were also understood to be building a francophone financial system that could challenge the economic hegemony of Anglophone elites. Add to that the early movement's deep ties to the Catholic Church, which was a core Francophone institution (Anglo elites tended to be Protestant), and it is easy to see how credit unions in Quebec have gained historical importance due to their connection to one of the province's most long-running and central social tensions.

Second, it seems that the Quebec movement has promoted its historical importance in a much more intentional and strategic way than has the American Credit Union movement. Where the American movement's history museum was founded only recently, and is so woefully underfunded that its director spends much of her time doing financial, rather than historical, education, the Mouvement Desjardins has been solidly and consistently promoting its history for decades. Not only is their museum well funded enough to have full-time docents available to greet all comers, but they also employ two full-time historians whose research on Desjardins and the movement have yielded numerous resources both scholarly and popular (including comics books on Desjardins in both French and English). Without similar institutional support for their history, American public understanding of the deeply meaningful contributions credit unions have made to our society is virtually non-existent, and our movement's public standing is thereby substantially lessened.

In sum, I highly recommend a visit to the Maison Alphonse Desjardins, should you ever get the chance. Not only does it leave its visitors with a deeply enriched understanding of the origins of the North American credit union movement, but it also demonstrates the opportunities that can be cultivated when a movement decides to take the task of stewarding its legacy seriously.

The view from Levis ain't bad, either... All photos courtesy of Allison Curran

Roy Cropp and the Lawrence Educators Credit Union

Though my professional interest in the history and organizational dynamics of credit unions developed later in my life, my first awareness of the existence of the cooperative institutions was the result of my paternal grandfather, Roy Cropp. A high school guidance counselor by profession, Roy spent several decades as the part-time manager of the Lawrence Educators Credit Union of Lawrence, Kansas, and his going out to work in the office several nights a week was a consistent element of my father's childhood. Since becoming interested in credit union history, I've been meaning to sit down with my grandfather and discuss his experience as a credit unionist, and my recent trip to Kansas presented just that opportunity.

Roy and Matt at the entrance of the original LECU

As with many credit union people of his generation, Roy Cropp became involved in the movement through his work. Having grown up on a Kansas farm during the Great Depression and Dust Bowl, he began his career at Lawrence High School in 1954 teaching vocational agricultural technology while simultaneously working on his masters degree in guidance and counselling. He was offered a job as a guidance counselor at LHS when he finished his degree in 1957, and he continued in that post until his retirement in 1990.

The office was on the second floor

A few years later, the Lawrence Educators Credit Union was founded to promote thrift and make credit available to the teachers of Lawrence's school system. The district provided the credit union with some office space on the second floor of the administrative building adjacent to LHS, and members would stop by to conduct their business from 4-6pm on Mondays and Wednesdays.

After five years of service to the credit union, its first manager retired, and the board approached Roy to ask if he'd take over. He agreed, but later recalled to me that he often regretted the decision during the first two years of his tenure. The previous manager had left the organization mired in debt, and Roy's first major challenge was getting the LECU back in the black. With some careful financial management, he was able to retire the debts within a few years, and he pledged to never again have the credit union borrow money. That conservative position sometimes put him at odds with the central credit union, which encouraged institutions with more loan demand than deposits to borrow to make up the difference, but Roy held firm and the LECU only lent from deposits for the whole of Roy's time as manager.