In the 1930's, the Great Depression cast hunger and poverty across the Island, and rural communities like Kensington were hit especially hard. There was no work for the skilled tradesmen, no money for buying goods from local merchants, and farmers could not find markets for their crops. As urban centres were strangled by the financial crisis, jobless young people were forced to migrate back to the Island, where the situation was-- if anything-- worse than what they had fled.
Faced with this human disaster, a co-operative movement started at St. Francis Xavier University in Antigonish, Nova Scotia, and began spreading across the Maritimes. The Antigonish movement was described at the time as a "courageous attempt of the people themselves to master the economic forces that held them in bondage." To combat economic collapse, it organized study groups and urged residents of communities to band together, forming economic collectives that were run both by and for their members.
On P.E.I., an economics professor, Dr. John T. Croteau, traveled to towns and villages across the province promoting the idea of co-operative credit societies. If the people of a community pooled their resources, he insisted, they could form a "baby bank," which was empowered by law to accept deposits and make loans to its members. Instead of being refused credit by banks, community members could help support each other through difficult times.
After months of study and discussion, the Kensington Credit Union was formed May 31, 1939 at a meeting held at the McMahon House, where 19 members joined. It was registered in Charlottetown on July 13, 1939. Mrs. E.G. Gillis served as the union's first secretary-treasurer and took care of its transactions directly from her home, opening the door to members at any time of the day or evening. Eventually, a more formal office was set up behind the Catholic church.
While Credit Unions were successful in coping with the Depression, World War II posed a new set of challenges for the economic co-operatives. Large numbers of its members-- and managers-- joined the forces, and insufficient funds led to instability and defaulted loans. In some cases, when the secretary-treasurer left for the front, members found themselves unable to cash their bonds.
But the Credit Union movement managed to stabilize itself in the post-war period and has continued to change with the needs of the community it serves. In the early 1980s, the request for member loans was rising, and the branch lacked the capital to service the demand. Fortunately, the credit union at the Canadian Forces base in Summerside was at the same time holding a surplus of development capital. After much negotiation, the Kensington Credit Union amalgamated with its counterpart at the Summerside base to form the Malpeque Bay Credit Union, which took its name from the fact that both towns are situated near the shores of the picturesque bay. When the Summerside base was closed in 1992, the assets of the Malpeque Bay Credit Union were consolidated in the recently-expanded Kensington branch.
At present, the Malpeque Bay Credit Union employs 15 people and serves 4000 members. It is an important part of an Island-wide network, with over 43,000 members controlling in excess of $200 million in assets. While circumstances are not now as desperate as they were when the movement was started, the Credit Union philosophy continues to play just as important a role in strengthening and maintaining our Island communities.