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June 26: Credit Unions

June 25, 2015

Cartoon-Bank-Transfer-Day-jpgPresident Franklin Roosevelt signed the Federal Credit Union Act on this date in 1934, establishing a system of government-backed, nonprofit, cooperative financial institutions to serve as alternatives to banks, which often denied services and loans to working-class people. Credit unions had been pioneered by Edward Filene, the founder of Filene’s department store chain, who was interested in helping workers avoid the pitfalls of usury. He led the Credit Union National Extension Bureau for fourteen years, building it into an umbrella for more than a thousand credit unions. In the bylaws of the Credit Union National Association, Filene was cited for “the unique debt which we and succeeding generations of credit union members owe and will always owe him — we make a part of these our By-laws, not subject at any time to amendment, this acknowledgement — and we create the office of Founder of this Association and name Edward A. Filene to that office for life. Thereafter said office shall be abolished.” Today there are more than 6,000 credit unions in the U.S., with some 100 million members/depositors. Many of them are linked to socially responsible, community development investment activity.

“Why shouldn’t the American people take half my money from me? I took all of it from them.” —Edward A. Filene