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The Credit Union Movement in Vermont: A Brief History

Introduction Background Early Years 1945-1954 1955-1960

 1960-1968 1969-1982 1982-Present Conclusion Notes

The Joseph G. Bergeron Era, 1982-Present

Joseph G. BergeronSadly, Howe never had to opportunity to enjoy his retirement; instead, he passed away, hand still firmly on the tiller, at a conference of credit union executives in 1982 at the age of 72. As the board had already been contemplating his departure, the transition went smoothly and Howe's assistant, Joseph G. Bergeron, was formally installed as League President on March 13 of that year.

This appointment represented something of a departure from the previous pattern of succession. Beginning with Roy Bergengren, all Vermont's League Managing Directors/Presidents had assumed their positions late in life after having retired from their primary careers. By contrast, Bergeron, at twenty-five, was the youngest person to ever assume the leadership of a state league. Though there are a number of reasons for this change, it can be largely understood as another sign of the credit union movement's growing professionalization.

In earlier years, the managing director had been largely assisted by the volunteer work of the board, and, when a new leader was needed, people with board experience were thus the most qualified candidates for the job. However, as the increasing complexity of its services forced the League to expand its staff in the 1970s, the professionals' knowledge of the League's functions became much more in-depth than that of its volunteers. As a result, when the board considered who would succeed Howe in 1982, Joseph Bergeron was the natural choice.

The Early Years

Raised in a credit union family (his father, Armand, served on the VCUL's board of directors for a number of years and was part-time manager of a small Catholic parish-based credit union), Joseph was hired as Howe's assistant shortly after graduating from the University of Vermont in 1978. Given the League's limited staff and resources, this role required him to wear many hats, and Bergeron often found himself on the road as a roving consultant and trouble-shooter for member credit unions. He also took the lead on a number of League initiatives, including ones specifically aimed at engaging young people (Bergeron was the first delegate from Vermont to CUNA-sponsored National Youth Involvement Board). Given the breadth of his activities and his intimate working relationship with Charles Howe, Bergeron was able to hit the ground running and initiate several ambitious new projects in his first years as the League's new  President. 

Text Box:  The Vermont Credit Union Center (and VCUL HQ) in the 1980s.
Courtesy AVCU.
One immediate change was the decision to relocate the League's headquarters from Montpelier to South Burlington. As its functions and staff had expanded, the League's Montpelier quarters had become increasingly cramped and in need of repair, so the search for a new space was initiated shortly after Bergeron took office through creation of a building search committee appointed by then Chair Wanda Baril, and chaired by Joseph Finnigan, then CEO of the U.S. Government Employees Credit Union of Chittenden County (now Vermont FCU). After initially considering the building that currently houses the Ronald McDonald House on the corner of Pearl Street and South Winooski Avenue in Burlington, a structure in South Burlington was selected that continuously served as the League headquarters for almost three decades.

As a result of the 1983 transition to these new facilities, not only did the League have all the space it needed for its own functions, but there was also room for a number of new ventures. Though not a direct project of the League itself, one of these new initiatives was "Dataline of Vermont," which grew out of a VCUL-spearheaded search committee tasked with researching existing data processing systems. Formed in 1983 as a co-operative venture (with initial administrative support from the League) between about a dozen credit unions and housed on the second floor of the new building, Dataline was intended to be a locally owned and administered alternative to the data-processing services, such as CUNA Data, that were then used by most Vermont credit unions.

Text Box:  Bergeron (top right) was recognized by CUNA Mutual magazine Dimensions in 1980 for his work with credit union youth.Though it lasted for a number of years and experienced periods of moderate success, the project was plagued by a number of issues. On the technological front, the equipment Dataline installed had been designed for a single credit union rather than a dozen, and a great deal of time and money had to be spent in order to make the system actually function properly and efficiently. Furthermore, even when technology was not causing headaches, the organizational structure of the company posed a recurring source of friction among the participating credit unions. There was no single authority empowered to make important decisions for Dataline; rather, all of the participant credit unions had to come to a consensus before anything could be done. This led to numerous conflicts over the next several years which resulted in several credit unions withdrawing from the project. Eventually, that issue was resolved when the G.E. credit union bought out the stakes of the other owners, and the enterprise gradually wound down over the subsequent few years.

A second major initiative that was housed in the League's new South Burlington building was the Vermont Credit Union Center. The Center was a full service credit union branch, complete with League-provided tellers, that served the members of fourteen credit unions from across the state. Their members utilized the Center as a branch of their credit union, and league staff utilized policies from each participating credit union and conducted settlement and transmittal of transactions daily. Initially operated completely manually, the League's first computer was acquired and software developed to automate the recording and transmittal of transactions. That software eventually became the basis for initial development of what later became the League's CUcard ATM program. The participating institutions were mostly of middling size with few branches and limited hours, so the availability of a full service branch in the Burlington area was a convenient way to increase service to their members. The Center did brisk business through much of the 1980s, but its usefulness was gradually eclipsed by the spread of ATMs, and it closed its doors in 1990.

Though the first credit union ATM was installed in Vermont in 1980, the League's sponsorship of an ATM program significantly accelerated the adoption of the machines throughout the state. Later described by Bergeron as the League's "crown jewel," the initiative was initially run in partnership with the Vermont National Bank before moving to Chittenden Bank. When Chittenden decided to drop the service, the League returned to using Vermont National Bank. However, when that institution was acquired by Chittenden Bank, the League banded together with two credit unions and three community banks to create the Falcon Cooperative ATM Network, which was serviced by BankNorth. After that bank was also bought by an out-of-state conglomerate, 5th/3rd Processing Systems (now known as Vantiv) was brought in and has remained the service provider down to the present.1

Text Box:  Bergeron addresses the crowd at the "Operation Grass-roots" pro-credit union rally in Washington, DC, 1991.
Courtesy AVCU.
Another role that the League embraced in an increasingly systematic way in the late 1980s and early 1990s was that of publicizing the movement as a whole. While its Publicity Committee had engaged in sporadic advertising since the 1970s, 1988 witnessed a number of credit unions in southeastern Vermont and southwestern New Hampshire joining together to form an advertising cooperative which bought ads intended to promote both individual institutions as well as the movement as a whole. After several years of moderate success, the League initiated a similar project on a state-wide basis in 1992 that aimed to promote the credit union movement to Vermonters in print, on the radio, and in television spots.

While the eighties had been a period of relative political quiet for the movement in Vermont, issues on the national stage in the mid-nineties required a level of mobilization that had not been seen since the fight over share drafts in the 1970s. After the banking lobby issued a number of legal challenges to the right of a credit union to accept small groups with differing common bonds as members, a call went out to credit unions around the country to show their support for new Federal legislation aimed at allowing federal credit unions to continue that practice, which had become a major source of membership growth. The Vermont movement sent two bus-loads of people to Washington, D.C., where they joined credit unionists from around the country for a massive rally in support of the bill, H.R. 1151. Largely as a result of the pressure exerted by the participation of credit union people in the so-called “Credit Union Campaign for Consumer Choice,” the bill passed by a wide margin in both the House and the Senate, keeping the door open for thousands of small groups to join existing federal credit unions when they did not have enough people to form their own institutions.

Along similar lines, extensive advocacy efforts were undertaken beginning in 2003 in the Vermont statehouse to completely re-write the state's credit union statutes to bring them on par with federal law. After some contentious political wrangling, the desired bill was successfully enacted in 2005., and the heightened awareness of credit unions in the statehouse generated by that campaign has persisted down to the present.

 New Millennium, New Challenges

 At the beginning of the 21st century, the League continued to both fill long-standing roles (such as that of political advocate) and take on new responsibilities. One such novel initiative was the promotion of financial literacy. For much of its history, the League had engaged in educational work, but its focus had been primarily on imparting vital skills to credit union staff and volunteers. In the 2000s, that mission was expanded to providing general financial education. To promote this end, the Social Responsibility Committee spent much of 2008 laying the groundwork for member credit unions to bring "Certified Credit Union Financial Counselor[s]" onto their staffs to help "provide solid financial advice for members who are struggling with difficult financial situations."2

This educational mission received a further boost the following year, when the Association (the League had updated its name in 2006 to the "Association of Vermont Credit Unions") was awarded an $137,000 Federal grant to create a program aimed at improving the financial literacy of Vermont high-school students. To develop and implement this initiative, called "Economy of Me," the Association employed its first youth financial literacy advocate through applications submitted by video. Colin Ryan, an occasional hobbyist stand-up comedian, travels to high-schools all over the state. His presentations were well received, and, by early 2012, Economy of Me had reached over 8,000 Vermonters.3

Additionally, this period saw the return of shared branching in new forms. While the Vermont Credit Union Center, which was among the first shared branches in the country, had been ultimately supplanted by ATMs, the establishment of the League's CUCard program allowed members of participating Vermont credit unions to use the ATMs of any other credit unions in the network as if the machine belonged to their own institution. After expanding steadily for a number of years, AVCU entered into an arrangement with the international CO-OP ATM network in 2008, which provided the members of participating credit unions fee-free access to more than 28,000 ATMs in all fifty states and ten foreign countries.

That same year, the AVCU also partnered with the CO-OP network to create an in-state shared branching system where members of participating credit unions can utilize the branches of other participating credit unions as if they were their own. The Vermont system is part of the national Credit Union Service Centers network, which facilitates similar inter-credit union cooperation in all 50 states.

Another practice that was revived during this period was engagement with the international credit union movement. In its early years, the League had taken a special interest in the development of credit unions in Fiji, sending donations to its movement and hosting its movement's visiting leaders on several occasions. However, this broad outlook seemed to have been replaced by a more provincial focus by the 1970s, with local and national issues absorbing the lion's share of the League's attentions for several decades.

The renewal of an international perspective seems to have really gotten underway in 2005, when, after the devastating tsunami in Southeast Asia, the Vermont movement raised several thousand dollars for relief efforts. The following year, at the suggestion of former AVCU board chair and Vermont's first member of the World Council of Credit Union's board Ron Hance, Bergeron pursued the creation of an international partnership with the Peruvian credit union movement through WOCCU. The Association and a number of member credit unions hosted a visiting delegation of Peruvian credit unionists in 2006, and their hospitality was reciprocated in 2007, when seven Vermont credit union people traveled to Peru and signed a partnership agreement between the Vermont and Peruvian movements.

The strength of this partnership was affirmed when, in response to a devastating earthquake in Peru that occurred shortly after the 2007 trip, the Vermont movement raised $5,000 to aid the recovery of its "sister" credit unions. This act of solidarity was followed up in 2010, when Vermonters again visited Peru to assist with the creation of an ATM network. Additionally, the AVCU has helped the Peruvian movement investigate the feasibility of creating a deposit insurance program, and Bergeron testified before Peruvian legislators on several occasions on the topics of credit union taxation and US credit union operations.

While the movement's relationship with Peru has perhaps been the most involved, Vermont credit union people also engaged with a number of other credit union movements around the world. In 2007, a group of Vermont credit union people visited Quebec to study the caisse populaire system in that province, and President Bergeron went to Poland in 2008 to learn about the country's rapidly expanding credit union movement. The movement's continued international perspective was further affirmed in 2011, when, in addition to returning to Poland, Bergeron visited the Netherlands to learn about Rabobank, that country's unique cooperative banking system.

Finally, any discussion of the credit union movement in the early 21st century would be incomplete without mentioning the profound impact of the financial crisis of 2008 and its resultant fall-out. Following the failure of Bear Stearns and the massive subsequent Federal bailout of the banking system in October, 2008, there was a great deal of concern as to what the future held for the credit union movement. Many corporate credit unions found themselves in dire financial straits when the financial instruments they held turned out to be worth a fraction of their face value, and credit unions were tapped to backstop their insurance fund.

However, such strains were offset by a new wave of support for the credit union model. In his 2009 Message to the Association's annual meeting, Bergeron noted that "consumers are flocking to credit unions as they receive more and more favorable press coverage as a safe harbor in an economic storm. " The following year saw the biggest surge in Vermont credit union membership in recent memory, and such growth, in combination with lending practices during the mid-decade boom years that were generally more cautious than those of commercial banks, buffered credit unions in both Vermont and around the country from the worst of the economic economic turmoil. "As challenging as 2009 may have been in credit union circles," Bergeron quipped in his 2010 Message, "consumer popularity made it a good time to be a credit union."

1 Joseph Bergeron, interview by author, South Burlington, Vt, September 14, 2011.

2 2009 AVCU Annual Meeting Report.

3 Colin Ryan, email message to author, January 31, 2012.

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Association of Vermont Credit Unions
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Tel: 802-863-7848     Fax: 802-864-4391