In celebration of Black History Month, we would like to take a moment to reflect upon the rich history and role of credit unions in African American communities, many of which were created with the people helping people spirit that has driven the credit union movement.
How the Credit Union Movement Began
The credit union movement began in the mid-19th century in Germany with a simple idea: that people could achieve a better standard of living for themselves and others by pooling their savings and making loans to their neighbors and coworkers.
Credit unions first reached American shores in 1909, when Alphonse Desjardins organized a credit union in Manchester, New Hampshire to avoid high interest rates being charged by loan sharks. On April 15 of that year, the Massachusetts Credit Union Act was signed into law, defining credit unions as “a cooperative association formed for the purpose of promoting thrift among its members.”
Credit Unions Serving the Black Community
As began happening with other disenfranchised groups, the first black credit unions were established in the 1920s and 30s to help farmers and urban groups move toward economic self-sufficiency.
As the Civil Rights movement gained momentum in the United States in the 1950s, so too did the establishment and growth of black credit unions. In fact, Martin Luther King, Jr. and the Montgomery Improvement Association (MIA) applied for a federal charter for a credit union.
Originally created to handle the logistics of the Montgomery Bus Boycott following Rosa Parks’ refusal to give up her seat, the MIA became a force for advancing other civil rights issues—including the creation of a credit union. However, King’s and the MIA’s application was turned down on the basis that the association was too wide a field of membership.
Dozens of banks and credit unions owned by Blacks were established at this time, too. These financial institutions played a crucial role in enabling African Americans to buy homes and establish lines of credit despite ongoing racial discrimination that was established through unfair and highly biased lending practices.
In 1968, Alltru Credit Union was founded by union brothers and sisters in North County St. Louis in an effort to create a fairer and more accessible lending and banking institution. For the last 55+ years, Alltru has only increased their focus on an equitable distribution of capital across St. Louis. Alltru Credit Union is intentional in our efforts to make sure that no one is left behind and that we’re providing fair and accessible banking for all.
Join us in commemorating Black History Month right here at home. Below are links to a few museums, libraries, memorials, and online resources where you can learn more about black history in St. Louis.