With the help of a young progressive, attorney Willard King, and several years efforts, the Illinois General Assembly passed the first Illinois Credit Union Act in 1925.
The Act’s purpose was “to safeguard the monetary deposits and other financial instruments of Illinois credit union members” through a system of supervision and regulation.
Bucky Sebastian was the internal counsel for the Illinois Department of Financial Institutions (DFI) from 1977-1981. One DFI responsibility was to charter and supervise the largest number of credit unions of any state system. At yearend 1977 there were 1,095 Illinois charters, managing $1.8 billion in assets for 1,274,732 members.
Sebastian and King became good friends discussing the legal history of the Illinois credit union system and their shared interest in the life of Abraham Lincoln.
In 1977 the bankers were challenging the Department’s authority to permit share draft (checking) accounts for Illinois state charters. There were also initial thoughts about how to update the Act to respond to deregulation. King’s knowledge of prior credit union legal changes was very useful in understanding the legislative politics for coops.
One of the stories King told was overcoming the opposition from established commercial and financial interests in 1925 to the new credit union option. King shared the position of the Chicago Association of Commerce which was: “This is a bill to permit a lot of ordinary people such as blacksmiths and bricklayers to go into the banking business, where they will certainly lose their money.”
To answer how long credit unions have been opposed by banking interests, there is a simple reply: Forever.