The Credit Union Movement

Pierre Jay, the Massachusetts banking commissioner, recommended in 1908 the legislature pass a law to organize credit unions after meetings with Alphonse Desjardins, a Canadian journalist.

Desjardins had organized the first North American credit union in 1900 and guided immigrant mill workers from Manchester, N.H., in starting the first U.S. credit union in 1908. Jay called on Desjardins to assist him in formally bringing this type of banking to the U.S. On March 3, 1909, the Boston Merchants Association and the Senate Banking Committee officially supported the bill, which Jay had drafted.

The Massachusetts Credit Union Act became law April 15, 1909, making Massachusetts the first state to pass a general statue incorporating credit unions. Under this act, credit unions were defined as "a cooperative association formed for the purpose of promoting thrift among its members."

Jay remained heavily involved in the continued development of credit unions despite his move to New York City. He remained conservative in ideas of national expansion, wanting first to prepare a model set of bylaws for those interested in establishing a credit union.

Sparking the credit union movement, the act further led to the formation of the Massachusetts Credit Union Association, directed by Roy F. Bergengren. With the formation of the association and the organization of 19 new credit unions in Massachusetts, the credit union movement transformed into a national campaign. Bergengren headed this campaign, and Edward A. Filene financed it. Consequently, the Credit Union National Extension Bureau was formed in 1921.

By 1930, credit union laws existed in 32 states and 1,100 credit unions had been established.