LANDIS, N.C. (4/23/13)--The first African American credit union in North Carolina was formed by 23 farmers on April 19, 1918, more than 95 years ago, according to an article posted by the North Carolina Credit Union League on its website.
Thomas Patterson, an African American farmer in Rowan County and 22 others joined in Landis, N.C., to organize the former Piedmont CU with $126 as an experiment. "The experiment was so successful that three other [credit ] unions were organized in different parts of the county," Patterson wrote in 1920. Nine others were formed in a second county that year, and a vibrant system of community development credit unions would emerge in the state, said the North Carolina Credit Union League.
By Dec. 31, 1919, the credit union had 82 members and total resources of $1,347.93, including $205.15 on deposit, payment on shares of $934.78, $663.25 in loans to 10 borrowers, $100 borrowed from banks, and $675.98 cash on reserve in banks.
Although the credit union no longer exists--it is not the same Piedmont CU that is now located in Statesville-- there is a clear account of the credit union written in 1920 by Patterson, and posted on the league's website.
In it, Patterson described what a credit union is, how it is conducted, its structure, savings and loans to members to conduct the business of farming. The money borrowed was used in one of three ways: to buy supplies to carry the farmer over the cropping season; to buy fertilizers; and to help tide farmers over who were making improvements to their homes.
Patterson answered the question "why deal with a credit union rather than a bank" by citing these reasons:
"Few banks care to lend money in sums less than $100. Then the prospective borrower must produce at least two real-estate owners known to the banker to go on his note, or the records of the parties must be looked up before the loan can be made. This causes delay. In most cases a bonus of 4% is charged, which, added to the legal rate, makes the interest, to begin with, at least 14%." He noted that a credit union charges 6% interest for the actual time he has the loan.
A credit union "teaches thrift and gives its members a certain kind of importance that they never possessed before ...What is one's interest is the interest of all, the communities working harmoniously together. Nothing has contributed more to this spirit of good will than have the credit unions," Patterson wrote. Read more about North Carolina credit union history.