Prince Edward Island
History of Credit Unions in PEI
In the 1930’s the Great Depression brought hard times to North America, including the Maritime Provinces. The Maritimes’ rural communities were declining. “Men were out of work and hungry; and crops could not find a market. Workers’ skills were rusting with disuse; the ambition and strength of the youth were not wanted.”
During these years, a movement starting at St. Francis Xavier University in Antigonish, Nova Scotia, spread over the Maritime Provinces and received acclaim as a “courageous attempt of the people themselves to master the economic forces that held them in bondage. “Small groups of people organized study groups and learned to use the techniques of economic co-operation, which normally led to the formation of a Credit Union, a factory and a co-operative store. The most outstanding characteristic of the “Antigonish Movement” was perhaps its decentralized nature – everyone learned to co-operate in groups to help each other and themselves at the same time.
The Depression years saw a migration of jobless Islanders from large cities in Canada and the United States back to PEI. The educational system underwent dramatic change. The stress was no longer on training an educated elite, but rather on helping a distressed people solve some of their pressing socioeconomic problems.
In 1933 Dr. John T. Croteau moved to Prince Edward Island to teach Sociology and Economics at Prince of Wales College and St. Dunstan’s University. Dr. Croteau’s expertise would provide a catalyst for finding a solution to the problems faced by the people of that time.
In 1935, Mr. A.B. MacDonald, a pioneer in the Antigonish Movement, came to PEI to give a lecture on the adult education movement. Dr. Croteau took great interest and with the co-operation of many dedicated people, he organized a number of study groups across PEI and broadcast a series of lectures on adult education over the local radio station, CFCY. The Adult Education League was set up to direct the overall movement.
Dr. Croteau explained to the groups that a Credit Union was a co-operative credit society – a “baby bank” organized among a group of people and empowered by law to receive deposits and to make loans to the members of this group. Bank credit was scarce in the 1930’s and so the idea of setting up community banks to make credit available to hard pressed farmers struck a popular note.
By February 1936, ninety-three study groups had been organized, involving 1,612 members. In addition to studying Credit Unions, they learned about religion, ethics, history, oyster culture, fishing and economics. Many of these study groups resulted in the formation of a Credit Union.
The first Credit Union formed on Prince Edward Island was the Liguorian Credit Union incorporated in May of 1936 in Charlottetown. By December 31, 1937, there were 25 Credit Unions organized and functioning with 1,815 members. By 1944, there were 50 Credit Unions involving 6,880 members.
In 1938 the Prince Edward Island Credit Union League was formed. Dr. John T. Croteau was the first managing director and its mandate was to arrange promotional and educational meetings, distribute supplies and advise the offices. In 1942, the League joined CUNA, Credit Union National Association, an organization based in Wisconsin and formed in 1934 to spread the Credit Union idea.
Credit Unions were very successful in maintaining the dedication of their members but the onslaught of World War II brought problems that took many years to overcome. There was a high turnover of experienced managers, a large number of people joining the forces, no extra time to attend study groups, insufficient funds to keep many Credit Unions afloat and bad loans. In some cases, the Secretary-Treasurer went off to war, leaving Credit Union members unable to cash their bonds.
The largest number of Credit Unions to exist on PEI at one time was fifty-nine during 1956 and 1957 with a membership of 9,150 and total assets of $1,283,152. A major contributor to the survival of a healthy Credit Union movement on PEI was Mr. Joseph Gaudin. He became Managing Director of the Credit Union League in 1964. Mr. Gaudin set up a Stabilization Fund that would take over inactive Credit Unions by buying out all the shares and assets and paying off former shareholders and investors. Twenty-one Credit Unions were closed out. A consolidation program was then set up which saw many successful mergers all over the Island.
The 15-year Comprehensive Development Plan made provisions for the Credit Union League to negotiate with Government in obtaining a grant of $180,000. This enabled the league to secure good management and a guarantee that made it possible to borrow up to $2,000,000 in additional working capital to assist Credit Unions.
The consolidation of Credit Unions combined with good management has ensured the strong growth of the Credit Union Movement on Prince Edward Island. At present, ten Credit Unions and five branch offices are in operation with over 60,000 members controlling assets in excess of $500 million. They have proven to be major contributors in strengthening our Island communities.
1930’s – The development of the co-operative philosophy and its growth on the Island and its impact on communities.
1940’s – The growth in numbers of credit unions and the challenges the people faced in maintaining the system in the face of WWII and other societal changes.
1950’s – The continuing growth in numbers of the credit unions and the associated changes in lifestyles.
1960’s – The consolidation of the credit union movement on P.E.I. and the changes taking place in society with regards to attitudes towards education and economic development.
1970’s – The building of stability in the credit union system and the growth in products and services.
1980’s – The growth of the system, as it becomes more and more in the mainstream of financial services.
1990’s – The continued growth of the system in the Province and the increased importance of technology to the system and society as a whole.