Credit Unions
1955 Article
Credit Unions may be described as cooperative banks. They may be small organizations consisting of one or two dozen members with a few hundred dollars as loan capital, or they may consist of several hundred members with loan capital amounting to thousands of dollars. Credit unions as such were seldom found in Mennonite communities in the 1950s. Most Mennonites used the regularly established bank facilities for depositing funds and as a source of loan credit.
The credit union idea, which is widespread in Europe and America, originated in Germany during a depression in 1846-1847. The leaders were non-Mennonites named Friedrich Wilhelm Raiffeisen and Franz Hermann Schulze-Delitzsch. The Mennonites in Russia became familiar with the idea before World War I, founding mutual credit societies, although little information was available about their operations. In Canada and United States credit unions have frequently been organized in conjunction with cooperatives especially among Mennonite farmers. Most of these, however, were not confined to Mennonites, but were opened to all who join the cooperative. In 1944 the Crosstown Credit Union, organized in Winnipeg for Mennonites, had over 1,000 members by 1952. There were no other known credit unions among Mennonites exclusively for church members. A few individual congregations in America have loan funds raised by members of the congregation which were available to members of this congregation at nominal rates of interest. In such cases members might borrow several hundred dollars to establish homes, and buy cars or equipment to aid them in earning their livelihood.
In 1945 the two largest Mennonite bodies in America established mutual aid services in which a primary function was to provide financial assistance to members of their own conferences. This money was raised from members interested in helping the brethren. These organizations, while serving some of the same purposes as credit unions, were operated differently from the normal credit unions. Mennonite Mutual Aid (MC) was organized in 1945 under the authorization of the Mennonite General Conference as a separate incorporated body with headquarters at Goshen, Indiana. General Conference Mennonite Church, on the other hand, made its mutual aid program an integral part of the conference service program. These mutual aid activities were still in their infancy in the 1950s, with a combined total of less than one-half million dollars in their revolving funds. -- J. Winfield Fretz
1989 Article
Credit unions can best be described as cooperatives that offer financial services similar to those found at banks. Credit unions may be small, with services limited to share (savings) accounts and loans. Or they may be large and also offer draft (checking) accounts, certificates of deposit, mortgage loans, credit cards, and facilities for electronic funds transfer.
The credit union idea started in Germany in the mid-19th century and grew throughout Europe and Asia. It came to North America via Canada and later spread throughout the United States. Credit unions were built around the principles of membership with persons of a common bond having an equal voice regardless of investments, refunds on purchases of goods and services from the cooperative, and the application of surplus income to benefit the organization, not individual directors or stockholders. For the most part directors of credit unions are volunteers.
Many of the basic tenets of the credit union movement are similar to Mennonite values of mutual aid and sharing. However, credit unions were slow to catch on among Mennonites, likely because the early credit union movement in North America flourished among labor unions and military organizations. Although by the 1980s there was a general openness among Mennonites towards credit unions, seeing them as being a good way to share wealth and knowledge for the mutual benefit of the community.
Mennonites in Russia became familiar with the credit union idea before World War I, founding mutual credit societies. One of the first Mennonite credit unions in North America, Crosstown Credit Union, was organized in 1944 to serve the Mennonites of Winnipeg, Manitoba. In 1955 the employees of Mennonite Publishing House (MC), Scottdale, Pennsylvania, organized a credit union, which changed its charter in 1983 to serve all members and employees of the Mennonite Church who live in Pennsylvania. Other Mennonite-related credit unions in North America are located in Hesston, Kansas (Central Kansas Federal Credit Union, 1960); Waterloo, Ontario (Mennonite Savings and Credit Union-Ontario, 1964); Lajunta, Colorado (Mennonite Federal Credit Union, 1965); Harrisonburg, Virginia (Park View Federal Credit Union, 1969); Kidron, Ohio (Ohio Mennonite Federal Credit Union, 1985); and Evanston, Illinois (Illinois Mennonite Federal Credit Union, 1988). Credit unions are also common in Mennonite communities outside North America, including some Latin American colonies. Mennonite Economic Development Associates, Mennonite Central Committee, and Mennonite Mission and Service agencies have played auxiliary roles in these developments. -- J. Lorne Peachey
Bibliography
Bender, Urie, ed, Working Together: The Story of Mennonite Credit Union (Ontario), 1964-1984. Waterloo, ON: Mennonite Credit Union, 1985.
| Author(s) | J. Winfield Fretz |
|---|---|
| J. Lorne Peachey | |
| Date Published | 1989 |
Cite This Article
MLA style
Fretz, J. Winfield and J. Lorne Peachey. "Credit Unions." Global Anabaptist Mennonite Encyclopedia Online. 1989. Web. 18 Apr 2024. https://gameo.org/index.php?title=Credit_Unions&oldid=86956.
APA style
Fretz, J. Winfield and J. Lorne Peachey. (1989). Credit Unions. Global Anabaptist Mennonite Encyclopedia Online. Retrieved 18 April 2024, from https://gameo.org/index.php?title=Credit_Unions&oldid=86956.
Adapted by permission of Herald Press, Harrisonburg, Virginia, from Mennonite Encyclopedia, Vol. 1, p. 733; vol. 5, pp. 211-212. All rights reserved.
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