Additional information

International Credit Union Day


The history of savings and loan associations began with the cooperative movement in the 19th century Europe. The cooperatives founded in 1846-47 in Germany after a difficult year of

drought are considered the first savings and loan associations. The first of them was created by

Friedrich Wilhelm Reiffeisen in Flammersfeld in 1849. The credit operation of the union depended on donations. The same man founded in 1864. another, more classic savings and loan association where the shareholders were mostly farmers. There, all the main principles of operation of a savings and loan association were applied.

Shortly thereafter, Luigi Luzzatti used the same  idea in Italy. The German and Italian

initiatives are regarded as the beginning of the credit cooperatives. It is known that in the middle of the 19th century there were several 

Estonian landlord credit unions that financed the buying-out of farms and they functioned on roughly similar communal principles.

Unfortunately, too little is known about them to draw any parallels between them and their Western European counterparts.

In the 1900’s the idea and form of organization spread to the American continent, at first to Canada and then the United States where it quickly gained popularity among the people.

The United States Massachusetts Credit Union League attempted to celebrate the official credit union day for the first time in 1927 on 17th January, the birthday of Benjamin Franklin. Sadly, the tradition soon faded away.

In 1948, the American Credit Union National Association (CUNA) took it upon themselves to annually celebrate the International Credit Union Day as an endeavour to consolidate cooperative enthusiasts.

The third Thursday of October was chosen as the date. With the active leadership of CUNA’s international operation the celebration took favour with the world’s credit cooperative members.

Since 1971 the International Credit Union Day (ICU Day) celebration has been organized by the World Council of Credit Unions (WOCCU) which was founded the same year.

The ICU Day celebration traditions are communicated by the WOCCU in their tip materials

Credit Cooperatives in the World

The European Network of Credit Unions (ENCU) was founded in 2009. It is a lobbying organization that represents numerous national CC unions and keeps tabs on the legislative initiatives of the European Commission and the European Parliament as well as organizing the representation of CC’s interests in the European Union’s administrative bodies. More on ENCU below.

Founding a cooperation

First it must be clarified why the money services offered by banks dissatisfy the founders of CC’s. After all, with the state’s encouragement banks have recruited virtually all Estonian citizens and businesses. Many have obliviously “sold their soul” to the banks and are tied with long-term commitments to the banks. It is a tricky knot to untie..

When the incentive behind founding an CC is clear, some laws of the Republic of Estonia which stipulate the main rules of the founding and function of a cooperation must be read with care. These are:

  • Savings and Loan Associations Act
  • Commercial Associations Act
  • Credit Institutions Act
  • Payment Institutions’ and E-money Institutuins’ Law
  • Money laundering and Terrorist Financing Prevention Act
  • Creditors and Credit Intermediaries Act

The first two are aimed directly at credit cooperatives. The next three prescribe some rules which concern all institutions that handle money. Being familiar with the Commercial Code is also beneficial.

Further action must be taken in accordance with the requirements enacted in the law. During the founding meeting (which is also the first general meeting) of the CC at least 25 people must be present for it to be legitimate. A notarial founding agreement is drawn up there. For the contract to be made the board, management, credit committee and an auditor must be chosen. The statute is also fixed in the founding agreement. The allocation of holdings must also be subscribed by the founding meeting

After the notarial contract is drawn up, a savings account can be opened and the membership fee as well as instalments for collecting holdings should be paid there. 

The board of directors submits materials to the Business Registry when holdings have reached 31 950 euro.

Such procedures are intended by the law. A notary can be consulted, whether it would be easier to invite the notary to the meeting or if a proper protocol with all required attachments could be compiled so that the founding agreement later be drawn up in the notary’s office based on these documents.

There are six months to collect money after the contract. After those six months an entry to the Business Registry must be made.

According to law, for a founding contract the following must be decided and fixed:


  1. Trade name of the CC
  2. Location (as marked in the statute)
  3. Address
  4. Purpose of operation (as marked in the statute)
  5. Area of operation (as marked in the statute)
  6. Names and residences of founders
  7. Amount of share capital of the savings and loan association (the planned amount of the share capital)
  8. Amount of membershio fee paid by the founders and how instalments have been divided between the founders
  9.  Amount of the instalments and membership fee, the procedure, time and place of the payments
  10. Names of the members of the board and council, their residences and national identification numbers
  11. Names of the loan committee members
  12. Names of the audit committee members
  13. Presumed amount of founding costs and the procedure of reimbursement


A notice concerning the Savings and Loan Association of Tallinn

The Estonian Savings and Loan Association Union as a representative body of credit cooperatives is responsible for maintaining the reputation of CC’s and deems it necessary to point out the following facts which have become public about the Tallinn Savings and Loan Association.

First it must be noted that the Tallinn Savings and Loan Association is not a member of the EUCC.

According to the Business Registry, the board member of the Tallinn Savings and Loan Association Aleksander Kortin is also the board member and shareholder of PLC Placet Group. The aforementioned trading company operates under the name SMS Money and issues according to its homepage and the webpage term loans with an annual interest rate of approximately 100%. The Union would like to point out that on 09.05.2012 PLC Placet Group has submitted a trademark application to the Patent Office to register the trademark “Tallinn Savings and Loan Association – a start to your new carefree life!” (“Tallinna Hoiu-laenuühistu Sinu uue muretu elu algus!”). 

Therefore the trademark is not applied for by the marked trade name owner Tallinn Savings and Loan Association but rather the trading company that deals with SMS loans. This in turn indicates the common-purpose activity of the PLC Placet Group and Tallinn Savings and Loan Association insofar as the SMS loan company would be unable to register a trademark without the written approval of the Tallinn Savings and Loan Association. 

The Estonian Union of Credit Cooperatives would also like to provide subsequent journalistic accounts of the activities of the Tallinn Savings and Loan Association:

1. “Kesknädal”, 18.08.2010. Marek Jürgenson. Savings and loan associations – an honest trade? (Hoiu-laenuühistud – kas aus äri?)

2. “Äripäev”, 13.09.2010. Hannes Sarv. Hefty 15% for a savings deposit, as part of a campaign (Hoiuse eest priske 15%, aga see on kampaania.).

3. “Eesti Päevaleht”22.02.2012. Andres Reimer. The funds of the Tallinn Savings and Loan Association are slyly used for SMS loans. (Tallinna hoiu-laenuühistu raha läheb kavalalt SMS-laenudeks.)

 The EUCC can not confirm or disprove the information revealed in the press, nor is it responsible for the contents of the information. Despite that, the union would like to bring attention to the press articles to raise awareness of the current and future members of the Tallinn Savings and Loan Association about the potential risk.

Extremely high interest-rate term loan activity is ethically as well as morally incompatible with cooperative banking. According to the International Co-operative Alliance (ICE) cooperatives are based on self-help, self-responsibility, democracy, equality, equity and solidarity. Thus, autonomous cooperatives bare a social responsibility. Consequently, a savings and loan association can never issue loans with an extortionist interest rate nor in any way encourage or support such action. Performing such an action under the name of a savings and loan association is in conflict with the core principles of savings and loan associations and therefore reprehensible. The Estonian Savings and Loan Association Union fundamentally condemns these activities.