Village Squire, 1978-09, Page 25BUSINESS
Community
Credit Unions
booming success
BY FRANCES BARRICK
In 1952, 24 people with a total of $24
marked the beginning of the Clinton
Community Credit Union.
Now 26 years later, this locally owned
and financially run institution has assets of
over $18 million and membership of about
7,000.
Cliff Parker, one of the credit union's
loan officer, attributes its growth to the fact
each member shares in the ownership of
the credit union.
"Everyone belongs to the membership,
whereas the bank belongs to a company,"
said Mr. Parker. "This feeling of
controlling and owning attracts people,"
he added.
To become a member, one must buy at
least a $5 share and live or work within the
association's defined boundaries.
The institution operates on a co-oper-
ative basis. "People are putting money
into share accounts and having it available
for people who need money to borrow,"
said Fred Gibson, the manager of the
Clinton credit union.
Each member votes to elect the seven
board of directors for a three year term.
This body oversees the operation of the
institution and drafts policy.
As well, each member votes to elect a
five member credit committee. This group
approves members' loans and applications.
There are three credit unions in Huron
County. Clinton was the first to open, with
the ones in Goderich and Winghaln
starting soon after.
Mr. Gibson said the Clinton office is the
largest in the county, and 40th largest in
the province. There are 1,160 credit unions
in Ontario.
Credit unions fall under provincial
jurisdiction. To get a charter, there must
be 25 members, and proof of a "good
enough base to start a credit union."
Mr. Gibson said the province is
becoming "more particular" about issuing
charters, as some attempts did not
succeed. The government now makes
"sure they will go on and succeed rather
than fall by the way side."
According to him, there are many
advantages to joining a credit union. Some
are life insurance savings up to $2,000 and
low cost loans which are life -insured. He
said a credit union differs from banks in
that the former only deals with its
members, while banks serve the general
public.
He said credit unions offer the same
service as banks. In the Clinton office, an
additional feature is open mortgages,
where a person can fully pay for it at
anytime with no penalty.
Any profit made is shared amongst the
members. Mr. Gibson said shareholders
will receive a dividend of 93/4 per cent on
shares, or for borrowers, a five per cent
interest rebate for the year ending Sept. '
30.
He said so far this year with another
month to go, three-quarters of a million
dollars will go back to shareholders.
Credit unions are an old institution.
Freidrich Wilhelm Raiffeisen, a small town
major and lay preacher. founded the credit
union system in Germany in the 1800's.
The first Raiffeisen credit union was
established in 1849. Today there are over
10,500 such banks in Germany.
Credit unions spread to Italy, rest of
Europe and to North America.
The father of Canadian credit unions is
Alphonse Desjardins. He adapted the •
European model to form the first credit
union at Levis, Quebec in 1900. Desjardins
had difficulty in getting credit union
legislation passed in Quebec at first, but
succeeded in 1906.
Ontario's credit unions started to
develop and grow following World War II.
Today they range from parish, industrial,
associational, ethnic backgrounds to
community.
While members originally tended to be
farmers, Mr. Gibson said people now come
from "right across the board."
"We have the area saturated and we
keep on getting more members all the
time," he said.
But the institution's growth was not
immediate. It took 10 years to get the first
million dollars in assets. "And it has
steadily progressed now to the point that
we have now reached $18 million in
assets," said Mr. Gibson.
According to the manager, one in three
Canadians belong to a credit union. This
fact alone assures him of the institutions'
future. "I would expect it is here to stay all
right."
PG. 24. VILLAGE SQUIRE/SEPTEMBER 1978.