For the purposes of this text we have defined a credit union to be a group of people who have cooperatively and democratically organized a resource that provides a varied range of financial services to benefit all members of the group. It’s difficult to determine precisely when and where this "cooperative banking" concept originated, however most believe it was developed from a need that a lower level class of people had for financial services, but were unable to obtain these services through traditional sources. It wasn’t until the 1800’s when co-operative banking reached Europe and finally in the 1900’s credit unions had found their way to North America.

By definition a credit union is a group of people. An existing common bond that determines the credit union’s field of membership usually identifies this group. Historically this common bond might have been the group’s place of employment, place of worship, residential area, trade or some other unique trait. In order to stay competitive in the financial markets, during the past two decades credit unions have found it necessary to expand their field of memberships to include a wider number of groups . These groups are known today as SEG’s or small employee groups. Twenty years ago a typical hospital credit union would serve only the employees of the hospital and their immediate family members. Today that same credit union may be serving the same hospital employees, any family members through blood or marriage, several walk-in clinics, medical laboratories, physical therapy clinics, counseling centers and local ambulatory service providers.