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May 19, 2016

By Patrick A. Dunae

The image of the ‘Little Man’ evokes the essence of the credit union movement in its formative years and was used in BC from the 1940s until the 1970s. Protected from a deluge of difficulties, the cheerful fellow strides confidently forward, carrying a bundle of savings under his arm. Credit unions provided members with insurance long before the advent of provincial medical plans.

Credit Unions: Agents for Self-Help and Community Action

Do you “bank” at a credit union? Have you ever paused to think what it might be that is special about these places, where the term comes from, what it means? Credit unions are important in the modern history of BC. They developed from financial co-operatives run by volunteers, but regulated by the provincial government. Credit unions promoted thrift and offered affordable consumer loans and mortgages to working-class people who were disdained by federally-chartered banks. The first registered credit union in BC was established at Powell River in 1939.

I recently chronicled Greater Vancouver Community Credit Union [GVC] and Ladysmith & District Credit Union [LDCU]. I also helped document the history of Vancity which celebrates its 70th anniversary this year. With these projects, I was looking closely at specific credit unions. But I was also interested in broader aspects of the provincial credit union system. The more I learned about its history, the more I admired and appreciated the system.
Credit unions grew out of a co-operative movement that began with the Rochdale Society of Equitable Pioneers, established by workers in Lancashire, England, in 1844. Co-operatives organized on the Rochdale model are controlled entirely by their members, practice direct democracy (‘one member, one vote’), and promote the welfare of the communities they serve. Credit unions in BC developed out of Depression-era adult education programs initiated at St. Francis Xavier University in Antigonish, Nova Scotia, and adapted here by the Extension Department at UBC. Credit union organizers were also inspired by liberal Catholicism and by the social gospel movement within the United Church.

Credit unions emerged in BC at a time when most people did not have any relationship with a chartered bank. Before the advent of credit unions, ‘unbanked’ consumers had to borrow from finance companies and pay high rates of interest; or they had to purchase items on installment plans, which also entailed onerous interest rates. Mortgages were unattainable for most working men and all single women until credit unions entered the market place.
Originally, every credit union had to have a common bond; that is, members had to be affiliated in some way, whether by occupation, workplace, religion, ethnic background, or locale. A common or closed bond system was predicated on personal relationships and minimized risk in loaning money.

GVC traces its roots to Rosary Credit Union, chartered in 1940 for parishioners of Holy Rosary Cathedral in Vancouver. LDCU was chartered in 1944 with a geographical common bond but had a strong occupational base. Most of its charter members belonged to Local 1-80 of the IWA and worked for Ladysmith’s largest employer, Comox Logging & Railway Company.

By 1960, there were over three hundred credit unions in BC. Nearly every community had one. In Vancouver, there were credit unions for every skilled trade and major employer, and myriad occupations, including taxi drivers and theatre projectionists. Their common bonds were usually evident in their names, but some outfits used acronyms, as in Stry Credit Union (1940), which served Vancouver street railway employees.

Vancouver City Savings Credit Union was established in 1946 for residents who did not belong to any of the closed bond credit unions in the metropolis. Vancity grew by purchasing and absorbing smaller organizations, like UBC Employees Credit Union (1947). It was able to expand beyond the corporate boundaries of Vancouver when common bond requirements were removed from the Credit Unions Act in 1975.

In recent years, the system has consolidated. But small, independent credit unions still exist and some of the larger ones extol their co-operative, community origins. When they celebrate their anniversaries with commemorative publications, they help to affirm the historical significance of the credit union movement in BC.

For more:
Patrick A. Dunae, Common Bonds: A History of Greater Vancouver Community Credit Union (2015).
Patrick A. Dunae, Ladysmith ‰ÛÒ Our Community. Your Credit Union ‰ÛÒ A History (2014).
Hershel Hardin, Working Dollars. The VanCity Story (1996).
Ian MacPherson, Co-operation, Conflict and Consensus: B.C. Central and the Credit Union Movement to 1994 (1995).