Credit co-operatives existed in one form or another in some Australian states as far back as 1905. In its early years, the co-operative approach to saving and borrowing attracted considerable public interest. However, during World War II, as a result of the economic conditions that prevailed, an embargo was placed on the formation of credit unions. In 1944 the embargo was lifted and two years later, the first of the modern Australian Credit Unions was registered in Sydney (Universal Credit Union). The founder, Kevin Yates, had observed credit unions during his military service in Nova Scotia, Canada, and what he saw inspired him to pioneer a similar set of social reform principles in Australia.

Although credit unions feature in only the recent chapters of Australian history, the co-operative principles at the core of their operations can be traced to the 1800’s and the early stages of Europe’s Industrial Revolution.

In the late 1840’s in Germany, new ground was broken by the mayor of a small village, Frederick Wilhelm Raiffeisen. He embraced the democratic principles of co-operation to form a mutual co-operative in which local farmers pooled their savings and lent to one another at reasonable rates of interest. By the turn of the century, credit unions gained in popularity and had been adopted by urban and rural communities across Europe, particularly in Switzerland, Austria and France.

In the early 1900’s, the credit union concept was introduced in North America and Canada. By 1934, representatives from 22 American states joined together to form the Credit Union National Association (CUNA).

Today’s credit union philosophy is still one of co-operation with an emphasis on people rather than profit. Credit unions help their member to better manage their finances and promote thrift. This co-operative concept has been embraced by many industry and employer groups and today’s movement is a mix of industry, community and affinity based credit unions.