The first such institution in the US was at a Catholic parish, with a precedent set by Canadian missionary.
As more and more Americans have learned over the years, a good alternative to a bank is something called a credit union, a financial cooperative controlled by its members and operated on the principle of people helping people.
But what most people don’t realize is the Catholic origins of such arrangements in North America.
According to Nathan Schneider, a professor of media studies at the University of Colorado Boulder, the first credit union in the United States was St. Mary’s Bank in Manchester, New Hampshire. It was developed in 1908 with the help of Alphonse Desjardins, who built Quebec’s famous caisses populaires.
But in fact, Desjardins got the idea from a priest on Prince Edward Island, Fr. George-Antoine Belcourt.
“Credit unions take many forms now, but their origins were specific,” Schneider wrote recently in America magazine. “According to Mr. Desjardins, ‘The caisse populaire is truly an organization of the parish.'”
By the time Fr. Belcourt established a “people’s bank” on Prince Edward Island, he had already had a long and interesting career. Ordained in 1827, he learned the Chippewa language in order to work in the Indian missions, and later wrote a Chippewa dictionary. After years of ministering in Canada’s Midwest, in what is now Manitoba, as well as in North Dakota, he was sent in 1859 to serve in the parish of Rustico among the Acadians of Prince Edward Island.
Canadian journalist Susan MacVittie writes that even though the island’s economy was strong, money was scarce and credit expensive.
“The few Island banks charged high interest rates, so farmers were forced to obtain credit from local merchants for supplies. This meant that they paid high prices and became indebted to the merchants almost all year round,” MacVittie wrote in the Watershed Sentinel.
Father Belcourt became determined to do something to help the Acadian people become more self-sufficient. He believed that farmers needed access to loans for agricultural purposes at reasonable interest rates. … He had been corresponding regularly with the French historian, Rameau de Saint-Père, who had been keeping him up-to-date on various economic movements in Western Europe, including people’s banks.
Father Belcourt used his influence to have a bill to incorporate the Farmers’ Bank of Rustico introduced to the legislature of PEI in 1863. Under his guidance, the bank was organized by a group of farmers, and 350 families of the parish of Rustico succeeded in setting aside almost $4,000 (an average of $10 per family) for the bank. The bank operated for 30 years, producing its own bank notes and providing loans. It is now a National Historic site.
It was the first people’s bank in Canada and the precursor to the credit union movement, says Scott MacDonald, author of From Humble Beginnings, a history of credit unions in PEI. “It was a credit union in every aspect, but the word credit union wasn’t around back then.”
As with Fr. Belcourt in Canada, it was a priest who established the first credit union in the United States. Msgr. Pierre Hevey, pastor of Sainte-Marie’s parish in Manchester, wanted to help the French-American mill workers save and borrow money. On November 24, 1908 he opened “La Caisse Populaire, Ste-Marie” (The People’s Bank). The following April, the New Hampshire Legislature approved a Charter to incorporate under the name of St. Mary’s Cooperative Credit Association. Transactions were conducted at the home of Joseph Boivin, the credit union’s first president. An all-volunteer staff assisted with daily activities.
The credit union is still operating today and has several branches. Boivin’s home, where the credit union first operated, now houses America’s Credit Union Museum.