Jun. 25, 2008 at 1:16pm

Where did credit unions get their name?

Posted by Jamie Chase in Credit Union History
Comments (3)

“Throw me a Kleenex, please,” I said to Melina, blushing, holding my right hand in front of my nose to hide a tiny drip of snot, pointing to the box of tissues with my left hand. She knew that I meant I needed one of her Puffs tissues, but I didn’t say Puffs. I said, “Kleenex.”

Imagine a world where consumers said, “I’m going to my credit union” when they were actually driving to their bank, or making payments online was called “online credit unioning.”

“Credit union” - what a name. Where did it come from and how can we turn it into Kleenex?

Well, thank Ed Filene and maybe Pierre Jay for coining the term “credit union.” They’re the old skool boys of financial social justice, though it was a fan-freakin-tastic name. (BTW, while researching this I learned words are not the smallest meaningful language units, morphemes are.)

Morphemes make up words and words make up our lexicon. The lexicon is a mental dictionary that stores our word knowledge. Hopefully, you understood what I meant earlier by “fan-freakin-tastic” because you’d heard the word fragments in context of your lexicon. Apparently, a word is a unit of language that by itself has no meaning without the context of our lexicon.

Whew. This is important because it relates to the lexicon of Edward Filene.

Yes, around 1908, Filene had the revolutionary idea to bring one of the first financial cooperatives to the United States to serve the employees of Filene’s Department Store. But he was also the first U.S employer to adopt a company union and support staff in collective bargaining. Filene realized that credit unions could help ordinary American workers gain access to loans they need without falling victim to usury. Equally important, workers could save their money so they were prepared when hard times hit.

His concern with fighting moneylenders and excessively costly consumer loans led to the choice of the word “credit.” And because Filene was a pioneer for workers rights, he coined the name for American financial cooperatives in relation to the “unions.”

Wow, Filene was fighting the good fight against the payday lenders of his time! How cool is that??!

Apparently, he was a darn good businessman and an amazing philosopher. It seems that some of his philosophies are more appropriate today than ever before.

“If people think they can survive best by getting ahead of one another, I shall expect them to go on trying, as a general rule, to get ahead of one another. When they come to see, however, that their best chance of survival is through getting ahead with one another, they will inaugurate co-operation.”

Five or 10 years ago, I was a huge critic of the name credit union. More recently, after my client Demaris Krummel urged me to read Filene’s book Speaking of Change, I realized the relevance of the name not just when it was coined during a very oppressive time for American workers, but today.

Unions, like credit unions, have changed very much since the 1930s. And perhaps both could regain inspiration for the empowerment and the opportunity they created at that time. But the time is now when working Americans need their services, advocacy and social justice more than ever.

Think about it.

Hardworking people across the Unites States are faced with the challenges of buying fuel for transportation to work, feeding their families and making their home payments, all while credit card interest rates and bank fees are constantly inclining. For example, Bank of America and Washington Mutual have jacked up their overdraft fees and made it easier for customers to be hit with multiple penalties.

So maybe it’s better that “credit union” isn’t thrown around like the word Kleenex, because the etymology of our name has a rich history of social justice. That history is relevant today more than ever before. It’s enough to inspire the leaders of both credit unions and unions to think about why they were founded and what they can do for hardworking people today.

Comments (3)

that was inspiring. thats also why i belong to Harborstone C.U. for the last 8 years.
1 | Left by Tim Mezen | Aug. 11, 2008 at 3:23pm

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If all Credit Unions were named Credit Union of Boeing, Credit Union of Wayerhaeuser etc etc, the Credit Union would be a generic term. But, currently all credit unions are advertising separately and branding themselves separately.

The banks have jacked up their fees. This should give the CU the perfect ad copy: Show a table with numbers … and say … “All the services of the bank with none-of-the $39 fees!”
6/29/2008 at 7:10 pm
2 | Left by eConsultant | Aug. 27, 2008 at 2:36pm

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Brilliant, Sanjeeve-brilliant!
7/2/2008 at 5:45 pm
3 | Left by Jamie Chase | Aug. 27, 2008 at 2:37pm

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