Tony Nguyen vinh Thuong
I. Introduction:
The concept of cooperatives in Canada has mainly been utilized in five major economic sectors: consumers and produces (food outlets), marketing, services (housing), and finance (credit unions). The concept of credit unions has been practiced in Canada since 1900s. The concept of credit unions is not new, credit unions have their historical origin in Europe. In fact, credit unions which were developed in Europe in 1850 have spread throughout the world.
II. A brief history of credit union in Ontario:
The history of credit unions in Ontario is a part of the history of credit unions in Canada. So, we can only understand the signification of the historical credit union events in Ontario, if we know the beginning of credit unions in Canada.
Credit Unions in Ontario:
In 1928, the first Ontario Credit Union Act became effective. Before that year, about 15 to 20 organizations had been operated. In fact, the oldest of these credit unions is the Ottawa Civil Service Cooperative Credit Society organized in 1908, and the first Credit Union became incorporated in Ontario in 1928. Another Ottawa Society known as the Cooperative Credit Society of Notre Dame d' Ottawa was organized in 1913 and became incorporated in 1929. The original Ontario Credit Union Act (1928) did not provide for adequate supervision and the government ceased to grant charters in 1935.
III. Conclusion:
In Ontario, Credit Unions have come a long way to serve the Ontarians in the desirability of thrift by systematic saving. Whenever there is no need, there will be no Credit Union. But the need is not over yet. So, the history of Credit Union in Ontario will travel further along the road of service to the Ontarians. However, the Credit Union in Ontario should be reviewed for its weakness as well as its strengths in order to develop these associations.
This article was written in December, 1986.
I. Introduction:
The concept of cooperatives in Canada has mainly been utilized in five major economic sectors: consumers and produces (food outlets), marketing, services (housing), and finance (credit unions). The concept of credit unions has been practiced in Canada since 1900s. The concept of credit unions is not new, credit unions have their historical origin in Europe. In fact, credit unions which were developed in Europe in 1850 have spread throughout the world.
- What is a credit union? - A credit union is a cooperative
financial organization owned and operated by its members. Its purpose is to
encourage savings, to use pooled funds to make loans, and to provide other
related services to members and their families. A credit union is part of a
world- wide cooperative financial system.
As a cooperative, a credit union provides the members with the
opportunity to have direct input into the operations of the organization. The
Board of Directors of the credit union is elected by and from the broad
membership body. As well, at annual meetings, members review the operations of
the credit union, and through a democratic vote, approve major policies for the
credit union.
A basic democratic principle of all credit unions is the concept
of “one member - one vote” regardless
of the number of shares held; credit union shares are able to withdraw.
II. A brief history of credit union in Ontario:
The history of credit unions in Ontario is a part of the history of credit unions in Canada. So, we can only understand the signification of the historical credit union events in Ontario, if we know the beginning of credit unions in Canada.
In 1900, Alphonse Desjardins, a parliamentary reporter and
journalist, established the first Canadian Credit Union: "Caisse
Populaire de Lévis ",
Lévis, Québec. By 1906, the Cooperative
Syndicates Act was passed.
Federal Credit Union legislation sought by Desjardins was passed in 1907 by the
House of Commons.
As the matter of fact, Alphonse Desjardins had been reading about
the successful European cooperatives, and corresponding with the noted
cooperative leaders, Henry Wolff in England, Charles Gide in France and Luigi
Luzzatti in Italy. After years of study and careful planning to construct the
right model for a credit union of French Canadians, Desjardins decided that "the
money for share capital must come entirely from the members and it would be
withdrew on short notice.” Desjardins also took the fundamental cooperative
principles: "one man-one vote and non-profit operation”. Indeed,
the two major conceptual contributions of Desjardins to the credit union
movement have been the introduction of the basic democratic principle of
cooperation and his unique tripartite management structure consisting of a Board of directors, a Credit Committee, and a Supervisory Committee.
The Caisses
Populaires of Canada, most of them in Québec, were to grow rapidly and
strongly like their counterparts in Germany and today they constitute one of
the most powerful cooperative financial systems in the world. Desjardins laid
the foundation for other credit unions throughout Canada. In 1908, Desjardins
was invited to help drawing up a Bill legalizing credit union in Massachusetts;
in 1909, the proposed law was submitted to the state legislature, and the Bill
was passed on May, 1909. He played an important part in establishing credit
unions in St. Marie Parish of Manchester, New Hampshire, and in New York in
1912.
While the Caisses
Populaires of Desjardins was
the predominant figure in cooperative credit societies in Québec, and was being
modified to meet the different social and economic conditions in the United
States as mentioned above. There can be no doubt that all important role
are parallels with by Moses Coady and the Antigonish Credit Union movement in
English Canada. In 1928, the Extension Department of St. Francis Xavier
University in Antigonish, Nova Scotia, was involved in every active adult
education programs in which small study groups were formed in many small rural
communities to discuss economic problems and methods of resolving them. The
cooperative route was followed, and the Antigonish Credit Union movement was
born. By 1933, the credit union movement in the Maritimes which took place was
predominantly rural, and organized in small fishing and farming communities.
Credit Unions in Ontario:
In 1928, the first Ontario Credit Union Act became effective. Before that year, about 15 to 20 organizations had been operated. In fact, the oldest of these credit unions is the Ottawa Civil Service Cooperative Credit Society organized in 1908, and the first Credit Union became incorporated in Ontario in 1928. Another Ottawa Society known as the Cooperative Credit Society of Notre Dame d' Ottawa was organized in 1913 and became incorporated in 1929. The original Ontario Credit Union Act (1928) did not provide for adequate supervision and the government ceased to grant charters in 1935.
Prior to 1940, in Ontario, there were about fifteen Cooperative
Credit Societies, mainly Caisses
populaires, established in Parishes in French speaking communities around
Ottawa. There was no existing Credit Union movement comparable with the
Antigonish Credit Union movement in Maritimes and Western provinces. The
establishment of the Credit Union in Ontario basically took place from 1940,
and was given its impetus by the United States National Association of Credit
Union. In consequence, the Credit Union movement in Ontario was very similar to
that in the United States. The main point was that the typical United States
Credit Union retained the basic framework of the Desjardins Caisse Populaire,
but the Credit Union in United States was predominantly urban, and not rural as
in Québec. So, until recently, Ontario has had the least development in rural
communities, but some progress is being made in this direction at the present
time.
In 1940, the new Ontario Credit Union Act was passed. Many
associations had been formed on a voluntary basis after 1935.
In 1941, the Ontario Credit Union League was formed with 67 Credit
Unions incorporated. The "League", now known as Credit Union Central
of Ontario, is the service organization and trade association for hundreds of
Credit Unions in the Ontario province. This organization acts as a Credit Union
for providing a wide range of professional support services to its
members.
In 1976, all Credit Unions and Caisses populaires in Ontario are
members of the Ontario Share
and Deposit Insurance Corporation (0SDIC).
OSDIC has been a government corporation, established by the Credit Unions and
Caisses Populaires Act ( 1976 ), and presently operating under the Credit
Unions and Caisses Populaires Ameniment Act (1983), to ensure each Credit Union
or Caisse Populaire deposit against loss. Individual member's savings are
insured up to $60,000.
Recently, the Credit Union has spread throughout many communities
in Ontario. Employees of an industry, members of a cooperative ethnic group, a
rural community, a religious group and a professional group may organize a
Credit Union, if they find that there is a need.
III. Conclusion:
In Ontario, Credit Unions have come a long way to serve the Ontarians in the desirability of thrift by systematic saving. Whenever there is no need, there will be no Credit Union. But the need is not over yet. So, the history of Credit Union in Ontario will travel further along the road of service to the Ontarians. However, the Credit Union in Ontario should be reviewed for its weakness as well as its strengths in order to develop these associations.
Toronto, December, 1986.
Tony Nguyen vinh Thuong
BIBLIOGRAPHY:
- Bergengren, Roy F., Credit
Union: A Cooperative Banking Book, New York: The Beckman Hill Press, 1931.
- Credit Union in Canada: The Dilemma of Success, Toronto: University of Toronto Law
Journal, October 1985, p.72-116.
- Dublin, Jack, Credit
Unions: Theory & Practice, Detroit: Wayne State University, 1966.
- Kenyon, Ron, To
the Credit of the People (Credit Union History, Ontario), Toronto: Ontario Credit Union League
Ltd, 1976.
- Macpherscn, Ian, Each
for All: A History of the Cooperative Movement in English Canada 1900-1945, Toronto:
Macmillan of Canada, 1979.
- McGuiness, Fred, 10 to 10: Canada Credit Unions . . . from 10
cents to 10 billion dollars in
75 years ( Credit Union History, Canada )
, Toronto : National Association of Canadian Credit Unions, 1976.
- Moody, J. Carroll, The
Credit Union Movement: Origin & Development (Credit Union History, USA), Lincoln
Nebraska: University of Nebraska Press, 1971.
-Ontario Credit Union: The Financial Alternative,
Toronto: 0SDIC,1984.
- Ontario
Share and Deposit Insurance Corporation (0SDIC), Toronto: OSDIC, 1934.
- What is a
credit union?, Toronto : 0SDIC,1984.
