Importance of cooperation and service

Credit unions like Alliant are categorized as “financial cooperatives,” which means that credit unions are co-owned by their members and operate for the mutual benefit of those member owners. The Credit Union National Association (CUNA) describes the principles of credit unions as “founded in the philosophy of cooperation” and having the mutual benefit of all members as one of its “central values.”

How it all began

Credit unions were started in the 1850s in Germany, during hard times there. Neighbors and family members banded together to help one another achieve financial goals. Those who had savings pooled their funds and loaned them to those who needed money.

This pooling of money and subsequent sharing with neighbors certainly exemplifies cooperation, and both the lenders and the borrowers experienced benefits from it. The savers/lenders earned a return on their money, and the borrowers gained access to the funds they needed.

A credit union today is obviously a more formally organized and regulated entity than those loose bands of farmers and townspeople in 19th century Germany, but the general concept remains the same: cooperation and mutual benefit.

Credit unions now

Today, the money that credit union members deposit is used to fund the loans made to other members who need to borrow money. The interest that the borrowing members pay on their loans is used to fund the interest paid to member depositors. This cooperation between savers and borrowers fuels benefits for both.