The FCU Act's Close Call

Nearly 4,000 credit union representatives will arrive in the nation's capital this week, and many will head to the Hill to press Congress to support their priorities. Few of them, however, will give much thought to a critical piece of legislation that passed 78 years earlier and made federal credit unions possible, and which only came about thanks to a fortuitous alignment of the stars. But the passage of the Federal Credit Union Act in 1934 wasn't the result of an astrological assist, but instead of years of behind-the-scenes hard work and grit, not to mention the most difficult economic times the country had ever encountered. The Great Depression began with the stock market crash of 1929. By the autumn of 1930, the country had experienced the first of four banking panics that were to occur over the next two years. The last of the four was a ten-day shutdown on March 6, 1933, and banks would not re-open until a new concept called "deposit insurance" was in place. Credit unions found themselves in the middle. Seven banking institutions were included in Roosevelt's bank holiday declaration (Proclamation 2039). Number six in the lineup, alongside Federal Reserve banks, national banking associations, trust companies, banks, savings banks, building and loan associations, was credit unions.