History of the Credit Union Movement
During the Great Depression of the 1930s, as citizens migrated in search of work, urgency grew to design and implement new financial solutions to get the nation back on its feet. In 1934, the Federal Credit Union Act became law under President Franklin D. Roosevelt. This new law created extraordinary options for people with similar employment to pool their relatively scarce resources for the greater good.
The building blocks of a better quality of life, then as now, were home ownership, automobiles, home furnishings, the means to manage emergencies and some level of planned leisure and financial predictability throughout the working years and retirement. Self-determined financing through shares in a credit union was fresh mortar for erecting a new economy during and after the hardships of the Depression.
Credit unions do pay taxes — payroll taxes, sales taxes and property taxes. Congress exempts credit unions from federal income taxes. The exemption was established in 1937, affirmed by statute in 1951, and re-affirmed in 1998 by H.R. 1151, the Credit Union Membership Access Act. This act states credit unions, unlike many other participants in the financial services market, are exempt from federal and most state taxes because credit unions are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially people of modest means.
Credit unions are economic democracies. Each credit union member has equal ownership and one vote — regardless of how much money the member has on deposit. At a credit union, every customer is both a member and an owner.
Credit unions exist to help people, not to make a profit. Our goal is to serve all members well, including those of modest means. Every member counts. Our members are fiercely loyal for this reason. They know we will be there for them in bad times, as well as good. This same people-first philosophy causes credit unions and credit union employees to get involved in community and charitable activities and other worthwhile causes.