Credit Unions have deep Catholic roots. The concept of credit unions was developed in the early 19th century by Italian and German parish priests, trying to help their struggling parishioners survive financially. Many conventional banks were either not serving these people at all, or were charging too much to do so. One of these parish priests who took action to fix this problem went on to become not only a pope, but a saint, Pope St. Pius X.
Why did the Catholic Church do so much to create and promote credit unions? In Catholic theology, members of the Church are considered the “Body of Christ” and therefore Catholics have a moral obligation to look out for each other. St. Paul’s 1st letter to the church in Corinth told them that “We are many parts, but all one body.” Elsewhere in scripture, we know by reading the Acts of the Apostles that the early Church banded together to help each other spiritually AND financially.
The first credit union in the United States still exists. It was formed in 1908 by a French Canadian priest in New Hampshire. Originally called “La Caisse Populaire, Ste-Marie,” or “The People’s Bank, St. Mary’s,” it is known today as “St. Mary’s Bank.” When thousands of banks failed during the Great Depression, St. Mary’s Bank remained open, reportedly even during the “Bank Holiday” of 1933 when President Roosevelt closed all banks nationwide.
As immigrant Catholics brought credit unions to America, they carried with them seven organizing principles that reflect Catholic teaching: 1) voluntary membership, 2) democratic governance, 3) member control of capital, 4) autonomy and independence, 5) education of everyone in cooperative principles, 6) cooperation among cooperatives, and 7) concern for a local community. Most credit unions today – even the secular one’s – are still built around these principles.
Today there are approximately 100 Catholic oriented credit unions in the United States. Many are very small, operating with volunteers out of borrowed office space, some with fewer than a million dollars in assets. At the other end of the spectrum are the larger more sophisticated entities like Alliance Catholic in Michigan, Holy Rosary Credit Union in New Hampshire, Notre Dame FCU in Indiana and Ohio Catholic Credit Union in Ohio.
In the credit union world, small is not necessarily bad. Small allows each individual to be taken seriously. But in today’s world, being too small can threaten the ability of a credit union to sustain itself. Instead of these smaller credit unions closing or merging, better means of collaboration within the Catholic credit union community can provide a way for all of them to sustain and advance their missions.
Beginning in 2016 – dubbed the “Year of Mercy” by Pope Francis – we have undertaken a nationwide effort to help Catholic oriented credit unions to collaborate more effectively while maintaining their individual identity and character by forming the Catholic Credit Unions of America (CatholicCUA.org). This kind of organization already exists in Europe and has proven to be an effective aid for collaboration and support to all involved.
We believe that bringing this spirit of mutual benefit and collaboration aligns well with Pope Francis’ recent challenge for credit unions to be more innovative and creative. Every pope in the past 120 years has seen the need for credit unions, because credit unions bring a unique structure and mission to the world of finance. Pope Francis, Pope Benedict and Pope John Paul II have all been strong supporters of the credit union movement.
It’s time to bring this movement back into the Catholic mainstream as it is needed now more than ever!