Over the years, I have seen the mission and values of the creditunion industry expressed in the service brought to its members. Ifind that looking at the roots of an institution can remind us ofits mission and values and connect us to those who have gone beforeus in service. The history, mission and values that lead to theestablishment of the American industry inform us today.

The first credit unions were founded on the ideals of self-help,self-responsibility, democracy, equality and solidarity. They wereimbued with honesty, openness, social responsibility and caring forothers. The same values that credit unions bring to their memberstoday.

Modern credit unions first took root in Germany in 1847 toassist farmers and small craft businesses that were in direfinancial straits when failed harvests and famines occurred. Thesebusinesses had no access to bank services; they were reliant uponprivate moneylenders.

In response, two Germans separately and independently tookaction. In 1847, Hermann Schulze-Delitzsch founded the first “rawmaterials association” for carpenters and shoemakers and the first“thrift and loan association,” essentially the first credit union,in 1850. Also in 1847, Friedrich Wilhelm Raiffeisen created thefirst aid association in Weyerbusch for the rural population. In1864 he founded Heddesorf Credit Union to help German farmerspurchase livestock, equipment, seeds and other farming needs.

These German credit unions' values included democraticgovernance, with each member having one vote, regardless of amember's deposit size, and a member-elected board ofdirectors. Essentially, this is the same governance modelthat is employed today. From the German roots, credit unionsquickly began to spread across Europe and jumped to India and toNorth America.

Alphonse Desjardins founded the first credit union in NorthAmerica, the Caisse Populaire de Lévis in 1901 in Quebec, Canada,with a 10-cent deposit. Desjardins wanted to provide affordablecredit to working class families, who were at the mercy of loansharks that charged outrageous interest. In 1908, Desjardins helpedfound the first credit union in the United States, St. Mary'sCooperative Credit Association in Manchester, N.H.

The American movement, however, really started in Massachusetts,when Pierre Jay, a banker and grandson of John Jay, the first ChiefJustice of the Supreme Court, and Edward Albert Filene pushed theenabling legislation in Massachusetts.

The Massachusetts Credit Union Act became law in 1909. Itserved as a basis for other state credit union laws and the FederalCredit Union Act of 1934.

Filene personally displayed the values underpinning the creditunion industry. He is known for building the Filene's departmentstore chain, but moreover, he was an enlightened employer believingthat his employees determined his success more than any otherfactor. He took care of his workers, mostly women, offering themfree health care, hourly breaks and meals.

Filene encountered rural cooperative banks, many started bywomen in 1907 while traveling in Calcutta, India. He realized thatthese types of cooperatives could help ordinary American workersaccess loans without falling victim to usury, and allow them tosave for the future.

In 1920, Filene hired Roy F. Bergengren, who had been a povertylawyer, to manage the Massachusetts Credit Union Association, wherehis promotion of credit unions led to 19 new ones within ayear.

Given this success, Filene founded the Credit Union NationalExtension Bureau in 1921 and hired Bergengren to run it. Itsambitious mission was to create effective credit union laws in allstates and at the federal level. Filene contributed over $1million to this effort.

Bergengren traveled the country appearing before statelegislators and recruiting volunteer organizers. In his passionatespeeches, he would state: “The real job of a credit union is toprove, in modest measure, the practicality of the brotherhood ofman.”

When Bergengren began his efforts in 1921 there were only 199U.S. credit unions. By 1925, 15 states had passed credit unionlaws, and 419 credit unions were serving 108,000 members. By 1930,32 states had adopted legislation with a total 1,100 credit unions,and by 1935, 39 states had passed enabling legislation and 3,372credit unions were serving 641,800 members.

The effort culminated with Franklin Roosevelt signing theFederal Credit Union Act on June 26, 1934, creating the nationalsystem to charter and to supervise federal credit unions.

Credit unions have been a shining example of quality service,fair prices, community outreach and ethical dealing. These are thevalues that benefit our communities now and have since theindustry's inception in Germany 165 years ago.

Stuart R. Levine is chairman/CEO of Stuart Levine &Associates. He can be reached at (516) 465-0800 or stuartlevine.com.