It’s time for International Credit Union Day! Every year, this is observed on the third Thursday of October, like a Thanksgiving that comes a little early. Also like Thanksgiving, International Credit Union Day is a time to be thankful for the shared history of people coming together to make life better for their community. International Credit Union Day doesn’t require buying presents for anyone or making costumes for the kids. You also get the added benefits of avoiding family rifts and not having to clean a kitchen. As your credit union, we will still set you up with a bunch of gifts, though.
Question: Why do we observe International Credit Union Day?
While we might take the idea for granted today, credit unions haven’t always been around. There was a time when money was controlled by a few very wealthy individuals, who could then decide who would receive loans and at what rate to pay or charge interest. They essentially had unilateral control of local economies without much fear of competition. Basically, the economic outlook of 19th century Europe looked an awful lot like the megabanks of the 21st century with less regulation, less responsiveness, and a greater slant in favor of a few oligarchs. It may seem difficult to believe, but not that long ago, the big banks were even worse for consumers than they are now.
We celebrate this day to remember that people taking control of their money is a radical idea. Loans let people create businesses, innovate technologies, better themselves through higher education or protect themselves from financial disasters. Competition from credit unions brought bank rates down, forcing the big guys to play on an even field with the rest of us. When communities came together to control their money, it meant that citizens didn’t need to worry about angering some irritable local banker, because one powerful person couldn’t control an entire economy. We may not have school plays about it and we may not spend all day cooking a turkey to remember it, but International Credit Union Day is also a time when people realized that the best way to make it through a long winter was to work together.
Question: How did those first credit unions help?
Farming has always been a business that lived close to the edge – one bad season could kill a family farm. In 19th century Europe, even with the Industrial Revolution in full gear, most small towns needed the agrarian part of their economies as a means of existence. In parts of Switzerland and what is now Germany, a bad drought hurt local farmers, threatening to put the bulk of these towns out of business. Local banks throughout the region were reluctant to provide loans to the farmers, even though that money was desperately needed to keep their farms and farming communities afloat. As if that wasn’t bad enough, food prices skyrocketed because of the same drought, making bankers less confident in lending money to the people who most needed it.
The first credit unions formed during the 1850s and 1860s, founded by Franz Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen. Providing bridge loans to local farmers helped alleviate the immediate problem, but as members of these credit unions saw how much good they could do, the idea spread quickly and credit unions swept through Europe, providing aid to the rapidly developing industrial sectors of Europe’s burgeoning economies just as it had helped to buoy the agrarian sector.
It was a fertile time in Europe and the world at large, for new economic ideas designed to address the needs of a new industrial workforce; but even as Karl Marx, Friedrich Engels, and their colleagues have been swept into the dustbin of history, credit unions are thriving. The credit union movement offered people the chance to control their success, protect themselves from disaster, and do so without revolution, violence or sacrificing the benefits of capitalism and meritocracy.
Question: How do we celebrate? I’m ready to party!
Well, of course you’re ready to party! Who doesn’t love to read up on the Industrial Revolution and the benefits of community-backed economic growth?
There’s no wrong way to celebrate International Credit Union Day, which is why the 200 million credit union members world-wide all celebrate with their credit unions differently. While we will have a small celebration in the lobby, we, at Destinations Credit Union try to celebrate every day by providing the best products and services and by helping educate you on your finances.
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