The credit union difference. Credit Unions are not-for-profit financial institutions that help members achieve financial well being.

A 19th century crop failure and the famine that followed in Germany helped sow the seeds of the modern day credit union.

Herman Schulze-Delitzsch organized a cooperatively owned mill and bakery that sold bread to its members at discounted prices. He later took the cooperative concept a step further — providing average people a way to obtain credit — with the first cooperative credit society.

From those humble beginnings of helping people buy bread, today’s credit unions feed people’s hunger for the American Dream.  

One example of a local credit union helping to make those dreams come true is $1.7 billion Numerica Credit Union. With humble beginnings as Spokane Railway Credit Union, Numerica has now grown to over 123,500 members and with three branches in North Idaho.

“Whether it’s the couple who wants to buy their first home or someone with less than perfect credit who needs a car to get to work, Numerica works with our members to fulfill their dreams,” said Anthony Moore, AVP Retail Experience for Numerica. “We’re here because of our members. Their success is our success.”

More than 100 million Americans enjoy the benefits of credit union membership, including thousands of North Idaho residents, but the credit union phenomenon is worldwide. An estimated 223,000,000 members belong to some 65,000 credit unions in over 100 countries around the globe.

This Thursday, October 20, marks International Credit Union Day and has been designated as a day to show what distinguishes credit unions from other financial institutions.

“What sets credit unions apart are the core principles and values of putting the well-being of members before profits,” says Moore. “Because Numerica is member owned, we help support financial well-being by offering better rates and lower fees as well as giving back to our community through volunteering, fundraising and sponsoring events.”

According to Numerica, here are some core principles of a credit union.

1.    Democratic control. Every member owns a share of the credit union, with an equal say in how it is run. The direction of the credit union is overseen by a local volunteer board of directors who are motivated by service, not bonuses or a select group of shareholders.

2.    Open membership. Membership requirements are pretty broad, making eligibility at a credit union a possibility for almost anyone. For example, Numerica says people are eligible for membership if they live, work, or worship in Washington, the North Idaho Panhandle, or are related or reside with a person who is eligible for membership.

3.    Service to members. Credit unions can offer better rates, lower fees, no-stress services and outstanding support. Many credit unions, including Numerica, offer products, services and technology to reduce the stress associated with managing one’s finances. 

4.    Distribution to members. Instead of turning profits over to bank shareholders, credit unions return the money they make to their members in the form of higher rates on savings, lower rates on loans, reduced fees and improved services.

5.    Building financial stability. Credit unions are not-for-profit and represent Main Street, not Wall Street. Decisions are made locally and on an individual basis.

6.    Co-Op Cooperation. With more than 5,000 credit unions across the country and access to tens of thousands of ATMs, credit unions are increasingly convenient on a national scale.

7.    Social responsibility. Concern for community is a core credit union value. Credit unions typically give back to their communities. For example, Numerica gives back at least 4 percent of its earnings to causes that help a lending hand, create leaders and celebrate the community.  

8.    Continuing Education. Whether working hand-in-hand with members at branches, teaching in the schools, or how-to videos, credit unions strive to break down communication barriers and tackle financial topics to help members live well.

Numerica Credit Union has over 123,500 members throughout Central and Eastern Washington and Northern Idaho and $1.7 billion in assets. It offers a full line of financial products and services, including mortgages and business products, and is committed to giving back four percent of their earnings to the community each year. Numerica is federally insured by NCUA and is an Equal Housing Opportunity lender. Membership is open to anyone who lives or works in the State of Washington or the Idaho Panhandle.

Credit Union history

The history of credit unions in America is long and varied. Mary’s Cooperative Credit Association was the first credit union in the United States and it opened in 1909 in Manchester, New Hampshire. During the 1920s, the U.S. credit union movement became increasingly popular. Families had more money to save and could afford products like automobiles and washing machines. They, however, needed a source of inexpensive credit to purchase these goods. The popularity of credit unions grew because commercial banks and savings institutions generally showed limited interested in offering such consumer loans. 

In 1934, President Franklin Delano Roosevelt signed the Federal Credit Union Act into law, creating a national system to charter and to supervise federal credit unions. The credit union movement grew steadily in the 1940s and 1950s. By 1960, credit union membership amounted to more than 6 million individuals belonging to more than 10,000 federal credit unions.

In 1970, the National Credit Union Administration (NCUA) became an independent federal agency. Congress also created the National Credit Union Share Insurance Fund (NCUSIF) to protect deposits at credit unions. The 1970s also brought major changes in the products offered by financial institutions. Credit unions, too, found they needed to expand their services. In 1977, federal legislation allowed U.S. credit unions to offer new services to their members, including share certificates and mortgages.

U.S. credit unions grew tremendously during the 1970s. The number of credit union members more than doubled during the decade, and credit union assets tripled to more than $65 billion.

Throughout the 1990s and into the start of the 21st century, U.S. credit unions continued to expand as a group. As of June, there were 5,887 credit unions with 104.9 million members.

By MARC STEWART

Director of Sponsored Content