From shared bonds to shared futures

Every year, we celebrate International Credit Union (ICU) Day on the third Thursday of October. The celebration honors the rich history of the credit union movement, highlights its global achievements, and raises awareness of the transformative work credit unions do worldwide.

This year’s theme, “One World Through Cooperative Finance,” is especially poignant in today’s increasingly divided world. It is a call to action for credit unions and their communities to find a fresh start for the movement where all can come together, grow in their financial health, and build a stronger, more connected world. But in order to shape our future, we need to understand our past.

Revisiting our history to build anew

The credit union movement is rooted in courage, energy, and a deep commitment to social equity. These ideals built the movement and are key to reigniting the fire that burns at the core of every credit union’s mission.

The concept of financial cooperatives traces back to Germany in the 1850s when local communities, particularly farmers and artisans, found themselves with limited access to funds. Out of necessity, they began pooling their resources to create financial cooperatives, laying down the foundation for what we now know as credit unions. By the 1900s, this model made its way to the United States, offering an equitable alternative to exploitative payday loans.

Early credit union pioneers worked tirelessly to address this imbalance, striving for financial fairness and inclusion.

Among these visionaries was Ohio native Louise McCarren Herring, “the mother of credit unions” whose personal involvement with the movement helped lay the groundwork for today’s credit union system. Through her work, we can still feel the dedication of pioneers like philanthropist Edward Filene and attorney Roy Bergengren, who, with other like-minded reformers, championed a new financial model designed to empower working people.

Financial democracy and the common bond

Edward Filene’s dream went far beyond financial services. In one of his final conversations with Louise Herring, he said, “We are both members of a minority group. I am a Jew, and you are a Catholic. Minority groups cannot thrive under any form of government except a democracy. A political democracy cannot survive unless it is supported by economic democracy. Economic democracy cannot succeed unless people who make the products can afford to buy them. But people cannot buy the products if they squander their wages on the high cost of credit. The goal of the credit union is to help working people maximize their paychecks.”
Filene’s vision wasn’t just about credit unions — it was about making democracy work by ensuring everyone had a fair shot at financial well-being.

Roy Bergengren, a driving force behind the legislative push that allowed credit unions to form, witnessed firsthand the struggles of railroad employees, factory workers, and farmers. Their inability to clothe and feed their families moved him to help build a system where common, shared identities could be used as a ladder to gain access to financial products and services.

This idea was quickly referred to as the ‘common bond.’

The unique strength of credit unions lies in their common bond — the shared interests and values of their members. This sense of community sets credit unions apart from traditional financial institutions, fostering a sense of ownership and shared purpose that remains central to their mission today.

Building collective financial strength

When credit unions gained momentum in the U.S., the socio-economic landscape was drastically different. There were no social safety nets — no Social Security, health insurance, or workers’ compensation laws. Usury laws were non-existent, and interest rates could be downright predatory.

The essence of the credit union movement, as envisioned by Filene, was simple: “Promote thrift and provide loans for provident and productive purposes only.”

Credit unions foster unity in one of the most intimate ways possible in the world of lending — by sharing resources and building collective financial strength. This is an action that has enabled members with the ability to improve their lives, even in times of economic stress and high interest rates. This cooperative structure ensures that credit unions remain focused on serving their members, not maximizing profits — a timeless principle that continues to resonate with today’s credit unions.

The beauty of an evolving movement

The challenge for existing credit unions is to get back to our roots of truly serving the underserved. The Financial Health Network reports that 70% of American households remain financially unhealthy with day-to-day financial realities worsening for many. In the face of credit union consolidation and the pervasiveness of financial deserts, it takes more than a passion to serve to make a difference for the members who need it most.

This might mean “thinking small” as in a commitment to underwriting small-dollar loans. Or, addressing community challenges on a demographic level, such as Arise Community Credit Union, Minnesota’s first Black-led credit union, that emerged to combat the predatory lenders that had filled the void left by retreating mainstream banks.

Leveraging technology and creative financial solutions allows credit unions of all sizes to meet the diverse needs of their members, all while maintaining their cooperative principles and financial stability. Innovation is the driving force behind credit unions’ ability to operate, acquire and maintain members, and sustain for years to come. The superpower of cooperatives is that they can share, learn, and adopt technology quickly and efficiently. The key is to find how to use the right tools to attract those who need the support and protect them from bad actors, while ensuring their businesses remain durable and thriving.

So, I’ll leave you with a few questions to answer for yourselves — since the movement is all about the inclusion of all and not just the thoughts of a few. Is the landscape we face today as credit union leaders one that is calling for rebirth? Is there a need for a full evolution of how we do business in order to continue on with our mission of people over profits? Do we want the credit union movement to live on with those same core principles of the past?

I know my answers to these questions, and I hope you feel the same.

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Denise Wymore is an inductee to America’s Credit Union Museum and a cheerleader for passion and commitment. Currently, she is the Manager, Corporate Philanthropy at Zest AI and is proud to be a credit union lifer who started her career as a teller.