Credit Union Background
PA Credit Unions: Safe and Sound
Credit Union Growth in PA
Typical Questions About Credit Unions

Brief Background of the Credit Union Movement

The not-for-profit credit union approach to providing financial services is based on a philosophy of "People Helping People ©". Credit union history dates back to Germany in the mid-1800's when townspeople pooled their savings to provide loans to farmers hurt by a poor growing season. This cooperative approach helped farmers avoid paying the high rates being charged by loan sharks. Today, credit unions continue to offer low-cost financial services that allow members to be good consumers by getting the best service and value.

Credit union members are part-owners of their financial institutions, also referred to as financial cooperatives. Each member has one vote regardless of their account size. Since credit unions are democratically controlled, members may run for election to the volunteer board of directors having direct input on credit union operations.

Credit unions consist of member groups that share common bonds. Credit unions in the United States have common bonds based mostly on occupations, government service, associations, churches or service providers. In Pennsylvania, most credit union common bonds are based on occupation. The National Credit Union Administration (NCUA) monitors/regulates federally-chartered credit unions and the Pennsylvania Department of Banking regulates state-chartered credit unions.

Nationally, there are 10,199 credit unions with 80.7 million members and $509.6 billion in assets. The Credit Union National Association (CUNA) is the national trade association for credit unions. In addition, there are 51 state credit union leagues and leagues for the District of Columbia and Puerto Rico. Over 90 percent of credit unions are affiliated with their state leagues.

The credit union movement is growing throughout the world, including in third-world countries and Europe where people need assistance with setting up consumer finance systems. There are credit unions worldwide in 91 nations, with over 108 million members. Credit unions in Kenya, Poland, Sri Lanka, Bangladesh, the former Soviet Union, Korea and other countries have helped provide citizens with a system to manage their finances. The World Council of Credit Unions provides assistance to groups in foreign nations looking to develop credit unions.