Credit unions were born of hard times. About the middle of the last century, the industrial revolution brought with it social and economic upheaval. To make matters worse, the banking system in those days was designed to provide capital for industrialization, not to respond to the needs of everyday people.

As a result, credit unions came into being for a very simple reason- the ordinary individual had almost no chance of securing a loan for any purpose – except at prohibitive rates which tended to worsen rather than alleviate the plight of the borrower.

Recognizing that the existing financial system would be of no help in breaking that cycle, the credit union pioneers concluded that the people would have to help themselves. Here, then, was the first enunciation of one of the guiding principles of the credit union movement – people pooling their resources to help one another. The idea of a credit union had been born.

Credit Union Philosophy

Credit unions are people-oriented financial institutions. They are non-profit cooperatives, formed, owned and operated for a single purpose: to help members help one another financially.

The first credit union in the United States was established more than 96 years ago. From that day to this, credit union philosophy has never varied from the basic principles of self-help and mutual aid.

To accomplish its purpose, your credit union operates on the basis of these objectives:

1. Encourage thrift among members, thus creating a pool of lendable funds
2. Make member-loans at reasonable rates of interest
3. Pay a fair rate of return on member savings
4. Provide helpful member financial services.

The credit union exists not for profit, not for charity, but to serve the economic well-being of its members.

Credit Union Common Bond

A credit union is the only financial institution based upon the principle that members share a common bond of employment, association, or community. Originally, this requirement was intended to identify groups of people who lived or worked close to one another and therefore could conveniently form a cooperative, non-profit, member-owned financial institution. Since then, the principle of a common bond has been expanded to allow a single credit union to serve several different common bond groups.

The common bond not only makes the credit union movement unique, it also has deeper implications in the lives of credit union members. Your credit union common bond is not just a principle; the common bond reflects a community of interest, a community of members united through shared experiences and goals. At the credit union you are truly a part of a vital economic association that influences and betters your life.

Credit Union Ownership

The members own the credit union. People join the credit union by establishing share accounts for their savings. Your share account is your share of the credit union.

Annually, the credit union membership elects individuals from its own ranks who have agreed to serve designated terms as members of the Board of Directors. It is these fellow members of your credit union who exercise general control of the credit union's activities for the benefit of the entire membership.

This unique method of electing members of the credit union to serve on its Board of Directors ensures that there is a cross-section of the views and financial aspirations of the vast majority of the members. As a result, Board decisions generally reflect quite closely the interests of the membership as a whole. Like all other volunteers, the members of the Board of Directors receive no compensation for their services.

Credit Unions were born in tough times but the underlying philosophy and guiding principles remain the same today – people helping people. That's the reason credit unions were started and that's what ABCO, YOUR credit union, is still about today!