Black History Month provides an opportunity to celebrate the rich history and culture of the Black American people. As a financial cooperative, we’re using this month to share the history of Black Americans in the world of finance.
Let’s take a look!
The beginning of the credit union movement
In 1849, Friedrich Raiffeisen founded a credit society in Flammersfeld, Germany with the goal of helping members have a higher standard of living by pooling their savings and offering loans to neighbors and colleagues. This historic credit society was the precursor for today’s credit union movement.
Credit unions first reached American shores in 1909, when Alphonse Desjardins organized a credit union in Manchester, New Hampshire to avoid high interest rates being charged by loan sharks. On April 15 of that year, the Massachusetts Credit Union Act was signed into law, defining credit unions as “a cooperative association formed for the purpose of promoting thrift among its members.”
Credit unions serving the Black community
In 1920, the first credit unions servicing the Black American community were established in the U.S., enabling urban groups to move toward financial independence. At that time, the first Black-owned bank in the U.S., the Capital Savings Bank in Washington, D.C., had been open 32 years. However, it wasn’t until the civil rights movement gained momentum in the 1950s that credit unions servicing the Black community became widespread. Then, under the Johnson administration’s Great Society Initiative, hundreds of credit unions were formed to service low-income demographics, often in Black neighborhoods. These credit unions provided low-income groups with the opportunity to grow their money and to get low-interest loans.
Dozens of banks and credit unions owned by Blacks were established at this time, too. These financial institutions played a crucial role in enabling African Americans to buy homes and establish lines of credit despite ongoing racial discrimination.
Today, there are 41 Black-owned financial institutions across the country, including 21 credit unions.
The African American Credit Union Coalition
In 1999, the African American Credit Union Coalition (AACUC), was formed to promote the strength and reach of the global credit union. The non-profit of African-American professionals and volunteers in the credit union industry supports programs that help increase the number of minorities in the credit union community.
Black Americans and finance
Black Americans initially struggled against prejudice and inequality in all financial sectors. It wasn’t until the turn of the 20th century that Black Americans began establishing themselves in the world of finance. Today, the Black American community plays an important role in corporate America despite ongoing discrimination. From financial influencers like Madam Money (Tarra Jackson) to financial podcast hosts like Chris Browning, Black Americans have a powerful impact on the world of finance.