The Origins of Co-operatives and Credit Unions
The story of co-operatives and credit unions began in Rochdale, England on December 21, 1844. The first co-operative, in Toad Lane, was created to supply wholesome, unadulterated food at reasonable prices to society members. Their success was based on their principles, which included: “one member, one vote; equality of the sexes amongst membership; only pure provisions should be sold, in full weight and measure; and the allocation of a ‘divi’ (dividend) to members,” guaranteeing that all profits were divided pro rata depending on the amount of purchases made by individual members. Although shorter, the roots of the Seven International Co-operative Principles are clearly found in these first statements.
From Rochdale, the co-operative idea spread throughout Europe. The first credit society – the forerunner to the modern credit union – was founded in 1852 by Friedrich Wilhelm Raiffeisen, the mayor of Flammersfeld, Germany, who was distressed by the near-starvation conditions endured by local farmers and townspeople, who were losing their homes and livestock to money-lenders who charged exorbitant interest rates.
Watch this video for a brief history of Manitoba Credit Unions.
Credit Unions in Canada
It was in his role as a legislative reporter that Desjardins heard a debate in the House of Commons that changed his life.
On April 6, 1897, Montréal-Ste. Anne MP Michael Quinn submitted a bill that would prohibit usurers from charging outrageous interest rates to desperate people. Quinn cited one example whereby a man had to pay $5,000 to cover the cost of a $150 loan taken to save his family from destitution.
Desjardins got his ideas of financial co-operatives – of people pooling resources for their mutual benefit – from credit union founders in Europe, including Raiffeisen. Desjardins saw that credit unions offered a way out and so, after two years of study and correspondence, he opened North America’s first co-operative loan and savings society.
Credit Unions in Manitoba
The first credit union in Manitoba was organized in 1937 by Father Benoit in the French farming community of St. Malo. Its citizens, like most farmers on the continent, were suffering during the Great Depression; Father Benoit brought them together to help each other financially. The first loan to a member – for $56.50, repaid in $2 monthly installments – financed the purchase of a cream separator.
Seven months later in the same year, Norwood Credit Union was founded in Winnipeg.
Following their example, people throughout Manitoba, drawn together through common ethnic, religious, professional or geographical affiliations, began founding credit unions in ever-increasing numbers. By 1939 there were 19 credit unions in Manitoba, with combined assets of $49,990 and 2,406 members.
Credit Unions Today
Credit unions are more successful today than ever. With more branches, more assets, more deposits and more loans at work in the community, the impact of member-owned and -based credit unions is felt around the province. Manitoba credit unions continue to build branches to provide their members and prospective members with responsive and friendly personal service.
And communities benefit from credit unions. More branches mean more employment and economic spinoffs. Sponsorships and donations increase, more property and business revenue accrue to local coffers, branch renovations and new construction create jobs and income for hundreds of Manitobans each year, and members’ deposits are recirculated in the form of mortgages and loans to local consumers, farmers and businesses.
Today’s credit unions deliver service – when, where and how members want it.
The expanding branch network gives members the personal service they want. Internet and phone banking gives them quick access and control and the surcharge-free national credit union ATM network gives them home pricing no matter where they are.
There is also a relatively new phenomenon in Manitoba with student-run High School Credit Unions. Read about Manitoba’s involvement here.
For more information about issues today’s credit unions are facing, read about Advocacy for Manitoba’s credit unions.