Credit unions trace their origin back toEurope in the 1840’s. During that time many of the farmers were experiencing crop failures and famine, and economic depression was widespread. To compound the problem, there was little or no aid for relief available to the people. A man by the name of Hermann Schulze-Delitzsch began organizing self-help cooperatives so that various craftsmen and workers could save money and receive credit in order to continue working. Each “member” of the cooperative was required to buy one “share” in this financial cooperative. Dividends were paid on savings, and loans were made for “productive purposes."
Two decades later in 1864, a German mayor named Friedrich Wilhelm Raiffeisen wanted to create an organization that would help Germany’s peasant farmers. Because German banks of the 1860’s would not lend money to them, these farmers were forced to borrow from money lenders who charged exorbitant interest rates and who were quick to foreclose on the farmers when payments were not made on time. Raiffeisen studied the cooperative Schulze-Delitzsch had created two decades earlier and started a credit cooperative known as Heddesdorf Credit Union.
By the early 1900s credit unions were popping up everywhere. In Boston, department store owner Edward A. Filene was making revolutionary strides to help his employees prosper by sharing the profits and benefits of his successful retail operation. He began a profit sharing program, instituted employee benefits and established a minimum wage and five day work week. Throughout his travels Filene was able to observe credit unions in action. He believed that if a credit union helped his employees achieve personal success his business would, ultimately, benefit. He was right, and in 1909 Filene helped push for the first state law that would lead to the official formation of credit unions in the state of Massachusetts.
Fast forward to October 1929. The depression hit America and many businesses failed. Even in the financial industry some 5,000 banks failed during the period from 1930 to 1932. However, during this same period of time, credit unions not only survived but thrived. Momentum grew until June of 1934 when Congress passed the Federal Credit Union Act providing for the formal establishment and regulation of credit unions within the United States.
Fast forward again to the year 1950. The post-war economy is booming and the population is exploding. On January 18, 1950, a group of employees of the Mississippi Employment Security Commission formally petitioned the Bureau of Federal Credit Unions for a charter to establish a credit union to serve the commission’s employees and their family members. By the end of that first year, the credit union had assets totaling $23,645. In July 1971 the credit union reached the $1 million mark. Today our credit union has well over $20 million in assets and serves employees and family members throughout the state of Mississippi.
