Financial Pioneers: Thomas Patterson & Piedmont CU

2021-11-02T16:31:34-05:00Connexus News|

You’ve likely never heard the name Thomas Patterson before. He wasn’t mentioned in many history books. As an African-American farmer in the 1900s, Patterson made a significant impact on the credit union movement. To celebrate Black History Month, we’re highlighting his contributions.

The Life of Thomas Patterson

Patterson lived and worked in Landis, NC, in 1918. Just 53 years after the end of slavery, this was an exceptionally difficult time for African-Americans in the U.S., especially in the South.

At this time, most farmers used the crop-lien system. This meant farmers put up their next crop yield as collateral for credit to buy food, fertilizer, and other necessities. The interest rates in the crop-lien system were excessive (sometimes up to 60% or more). Patterson wrote the following in the April 1920 edition of The Southern Workman: “Perhaps the greatest drawback to the average poor farmer … is the lack of capital. If he buys fertilizer on time, borrows money, or contracts to be carried over the cropping season, it is usually at such a ruinous rate of interest that few ever get out from under is baneful influence.”

What made it even more difficult was that Patterson lived in the era of the Jim Crow Laws. These laws enforced segregation. For example, when an African-American farmer needed a loan, the law required him to have a white man vouch for his character.

Leading the Charge for Change

Patterson knew he had to do something to help African-American farmers or they would face debt for the rest of their lives. In April 1918, Patterson and 22 others took $126 of capital and organized Piedmont Credit Union — the country’s first African-American credit union. The African-American farmers of Rowan County used the cooperative model to their advantage. According to CUInsight, Piedmont members “cooperatively bought food, fertilizer, and other necessities in order to save money and collectively build wealth.” When farmers needed loans, the terms were a fixed 6% interest rate.

No one knew whether Piedmont CU would work. In fact, it began as an experiment. And that experiment turned out to be an absolute success. By the end of 1919, Piedmont was up to 82 members and $1,347.83 of total resources. Word got out about Piedmont’s growth. By 1920, there were 13 other African-American credit unions formed in the state.

His Impact on the Modern CU Movement

Though Piedmont CU no longer exists, today there is an African-American Credit Union Coalition (AACUC) headquartered in St. Louis. It started in 1999, and now serves more than 150 credit unions throughout the country.

Thomas Patterson started the African-American credit union movement to help his fellow community members. He was a pioneer and a leader that we, as credit union members, should never forget. As Patterson himself said, “After all, it is not what a man makes that gives him standing in the community; it is what he saves that counts. The [credit] union helps him to save.”

Read Patterson’s full article titled “Negro Credit Unions of North Carolina.” It begins on page 180.