In the 1840s, a group of European innovators shared an exciting vision: to develop a cooperative credit society focused on serving members, particularly skilled workers needing money for business purposes. One of the earliest such societies, a group of weavers from Lancashire, England known as the "Rochdale Society of Equitable Pioneers," published a series of practices (later known as the Rochdale Principles) to govern the operations of cooperative credit efforts. They were:
- Open membership
- Democratic control (one person, one vote)
- Distribution of surplus in proportion to trade
- Payment of limited interest on capital
- Political and religious neutrality
- Cash trading
- Promotion of education
Guided by these concepts, the cooperative credit movement experienced great success throughout Germany and other European countries over the next decade. Within 9 years of the establishment of the first credit society in Germany, there were 182 other "people's banks" in the country serving 18,000 members.
In time, the cooperative credit movement found its way to North America. In 1900, Alphonse Desjardins organized the first North American credit union, La Caisse Populaire, in Levis, Canada. Soon, the movement crossed the border into the United States. Just seven years later, the first credit union in the United States, La Caisse Populaire Ste. Marie in New Hampshire, opened for business.
The U.S. credit union concept spread quickly with state-based movements emerging throughout the northeast.
Thanks to the efforts of Edward Filene and Pierre Jay, Massachusetts was the first to pass a credit union law in 1909 with New York following close behind.
