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People Helping People – The Credit Union Philosophy

 International Credit Union Day Celebrates:

The Authentic Difference

On October 20, 2016, credit unions around the world will celebrate International Credit Union Day (ICU Day).

Credit unions are not-for-profit financial cooperatives, offering the same services as other financial institutions, but with a people-first philosophy. Since 1948, on the third Thursday of every October, credit unions have celebrated the principles that make credit unions the best financial partners of people all over the world. “The authentic difference,” this year’s ICU Day theme, zeroes in on what makes credit unions different from banks, fintech startups and other financial institutions—our principles.

Credit unions all over the world have operated according to the same core principles since the 1850s, when a group of weary German workers, tired of being exploited by loan sharks, formed the world’s first credit union by banding together to provide affordable credit to each other.

Why are Credit Union different than any other financial institution?

These principles are derived from the 7 cooperative principles, shared by all cooperatives. They are:

  1. Democratic Control – One member = One vote. Whether you have $5 or $5 million, your voice is equal.
  2. Open and Voluntary Membership – Members are connected by a bond of association, fostering a sense of community.
  3. Non-Discrimination – Credit unions are open to all without regard for race, orientation, nationality, sex, religion, gender, or politics.
  4. Service to Members – Credit unions are ranked No. 1 in service in numerous surveys, because they exist to serve members, not profit.
  5. Distribution to Members – Credit unions return all profits to their members through dividends, lower fees, better savings rates, and improved services.
  6. Building Financial Stability – Credit unions are historically stable organizations. They’re owned by the people they serve, so they don’t take unnecessary risks.
  7. Cooperation Among Cooperatives  redit unions and cooperatives share the same principles. Together, they amplify each other’s good works.
  8. Social Responsibility – Credit unions strive for social justice by committing to strengthening their communities and helping people of modest means.
  9. Ongoing Education – Credit unions prioritize financial education for their members, employees, and communities as part of their pursuit of social justice.

Where do Credit Unions come from?

For more than 160 years, credit unions have put people before profit.

In the 1850s, hard times hit Germany, and people turned to each other for help. They removed small savings from under mattresses and started making reasonably priced loans to one another. These early credit unions were the model for all the credit unions that followed: not-for-profit, democratically controlled and community oriented. The principles that guided them then, guide credit unions today.

In the 1920s, Edward Filene took cooperative finance to the next level in Boston, as a means of lifting working people out of debt and creating a better life. On January 17, 1927, the Credit Union League of Massachusetts celebrated the first official credit union holiday. January 17th is the birthday of Benjamin Franklin, America’s “Apostle of Thrift,” who credit union founders believed to symbolize the purpose and spirit of credit unions.

During this time, the U.S. credit union movement was new and spreading. In response to the Great Depression, new credit unions were being formed to fill the void left by shuttered banks.

The U.S. Credit Union National Association (CUNA) and CUNA Mutual Insurance Society initiated a new national Credit Union Day celebration in 1948. The third Thursday of October was set aside as the national day of observance. This occasion brought members together to promote the credit union philosophy nationally and reflect upon credit union achievements and history. Members raised funds for the movement and paid homage to loyal supporters and pioneers.

The World Council of Credit Unions, established in 1971, assists credit union movements and supports their development around the world. World Council observed the first International Credit Union (ICU) Day more than 30 years ago, and continues to endorse global celebrations. The credit union movement has grown to more than 217million members in 101 countries. Celebrate the credit union difference during this year’s ICU Day – October 20, 2016.

Why We Do What We Do?

This is why we celebrate ICU Day at St Francis FCU. We think ideas like people before profit, social responsibility, and financial education improve lives. It’s why cooperative banking is a key component of helping people in developing countries get access to microloans, or a middle-class couple in Greenville receive an affordable mortgage for their first home.

So when we wish you a Happy ICU Day at St Francis FCU, know that we’re thanking you for belonging to a movement that’s helping your neighbors—and people around the world—grow and thrive and follow their dreams.

Copyright 2016 Credit Union National Association Inc. For use with members of a single credit union. All other rights reserved.

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