The New York credit union movement began in the early 1900s due to the efforts of the Russell Sage Foundation. The Foundation was established in 1907 to investigate social problems and propose and sponsor practical solutions.
One of the Foundation's focuses was the chattel and salary loan business in New York City. At the time, people in need of a loan had three options: ask their employers; apply for a bank loan, which was difficult to obtain; or turn to an illegal "loan shark" and accept the high interest rates. After a 14-month study of the situation, the Foundation decided to create a Division of Remedial Loans. In 1910, Arthur Ham was appointed first director of the Division, and Cary W. Hayes was employed to investigate the prevalent industrial savings and loan schemes.
Hayes's study, combined with the new success of credit unions in Massachusetts, led the Foundation to recognize credit unions as a valuable, needed solution for New York's issues. In 1912, Hayes contacted Alphonse Desjardins for assistance in writing a credit union law for New York.
After months of travel and collaboration between Desjardins, Ham and others at the Foundation, a credit union bill was drafted for the state of New York. This bill came to be recognized as the Eisner-Pollock bill, which was quickly followed by the Cole-Roosevelt bill. Both served similar purposes, which were, according to an article from the New York Herald, "to furnish facilities for saving dimes and quarters, smaller amounts than ordinarily are deposited in savings banks."
On May 17, 1913, the Eisner-Pollock bill officially became law with the approval of the Governor, allowing credit unions to be formed. In early 1914, employees of the Bing and Bing real estate firm formed New York's first credit union: the Speedwell Credit Union. Within the year, they were joined by two other pioneering credit unions.
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