As you read in the last post, in 1915 North Carolina was among the early leaders in promoting the creation of credit unions - a new idea in the U.S., a new form of financial institution. Federal legislation permitting the formation of credit unions in every state was not enacted until 1934. SECU was formed on June 4, 1937.
Why was SECU created? For the same basic reason that all credit unions were formed - to give working men and women access to credit at a fair and reasonable rate. Consumer credit was not available through the regular banking system for most working people. "Alternative lenders" (often referred to as "loan sharks") charged exorbitant rates and often resorted to some "less than cordial" collection practices! Borrowing money could be a risky business in more ways than one!
Why 1937 for SECU? Can you spell "Great Depression"? If you are not a student of history, you might want to brush up on that era. How bad can things get? Desperate was the status quo for many Americans. Given the times, even those with stable jobs in state government and the public schools often "came up short" before the end of the month - still do!
SECU was created so that North Carolina state workers could pool their savings and lend to one another. As with every credit union, SECU membership was limited to a well-defined group - employees of the schools and state government. The credit union was basically a lending and savings club solely for its members. Each member of SECU was an equal owner, regardless of their job title, their wealth or lack thereof. You will be pleased to know that Black state employees were admitted as equal members, too - not all that common in the 1930's South. And, there was a female member on the first SECU Board of Directors - "DEI" is not a novel idea at SECU. The cooperative was controlled and operated by the member-owners. The main function of SECU was to make small, short term loans to the membership.
SECU members held steady jobs and had the ability to repay over time. Since members were your co-workers who knew you well, sound lending decisions were made. And, since you were borrowing your co-workers savings, there wasn't any doubt you were going to repay...
... if you didn't, going to work might - shall we say - "get a little intense".
SECU still operates the same way, did you know that?
