Co-ops are owned by their members—the people who use the cooperatives’ products and services—and are driven by service rather than profit. There are thousands of cooperatives operating in dozens of industries throughout the world, with a heavy concentration in Minnesota and Wisconsin.The first U.S. cooperative was a town mutual insurance company in Philadelphia organized in 1752 by Benjamin Franklin.
- Like Franklin’s company, many town mutuals got their start when neighbors joined together to insure their farms and homes—primarily because big insurers ignored them or charged exorbitant prices.
- Today, town mutuals primarily serve farmers, rural homeowners, and some small main-street businesses.
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Dairy cooperatives established in the early 1800s were among the first type of agricultural co-ops in the United States. They pooled milk from neighborhood farms, processed it into cheese and shipped it to urban areas for sale. Today, dairy co-ops vary in scope from bargaining associations to fully integrated marketing and processing cooperatives to small, local cheese-processing co-ops.
- In 1913, representatives of cheese factories in Sheboygan County, Wisconsin, organized the first federation of cheese factories.
- By 2013, cooperatives accounted for 78.1 percent of U.S.-marketed milk.
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Cooperative housing is controlled and managed by residents and can take many forms—from high-rise apartments to single family housing.
- There is no consistent answer as to when the first cooperative housing community was built in the United States. Most sources point to a Manhattan property in 1876 and peg New York as a forerunner in co-op housing development.
- Senior housing cooperatives first appeared in Minnesota in 1978 and today have over 90 percent concentration in Minnesota and Iowa.
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Working class citizens formed the U.S. credit union movement in the early 1900s in search of affordable financial services only available to the wealthy. By pooling their deposits and shares to finance loans, ordinary citizens gained access to better returns on savings, lower rates on credit, and fewer fees on average.
- A group of Franco-American Catholics in Manchester, N.H., organize the first U.S. credit union—St. Mary’s Cooperative Credit Association—in 1909.
- In 1934, Franklin D. Roosevelt signed the Federal Credit Union Act into law, creating a national system to charter and to supervise federal credit unions. Today, more than 100 million people belong to credit union in the United States.
- Credit unions did not receive taxpayer bailouts during the 2008-09 financial crisis. Rather, insured credit unions opted to pay back the government costs of establishing a fund to protect member deposits.
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Congress established the Farm Credit System in 1916 to guarantee American agriculture a reliable source of credit.
- The Farm Credit System is a nationwide network of borrower-owned lending institutions and specialized service organizations that provides loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.
- The Farm Credit System provides more than one-third of the credit needed by those who live and work in rural America.
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Rural electric and telephone cooperatives were formed when the cost of expanding service to rural areas discouraged for-profit utilities from serving these areas.
- In 1936, Franklin D. Roosevelt signed the Rural Electrification Act as part of his New Deal programs to overcome the Great Depression. The law allowed the federal government to make low-cost loans to fund rural electric cooperative start-ups. At the time, just 10 percent of rural Americans had access. By 1950, 90 percent of American farms had electricity.
- In rural areas where farmers were already familiar with agricultural cooperatives, the model was often used to provide telephone service to their communities. Today, telephone cooperatives serve about 5 percent of the U.S. population, but their service area covers more than 40 percent of the country’s land mass.
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Cooperative health maintenance organizations (HMOs) were organized after passage of the federal HMO Act of 1973 to help consumers address the problems of rising health-care costs and physician shortages. The Affordable Care Act of 2010 included a loan program that financed the creation of 23 nonprofit health insurance cooperatives (CO-OPs) across the nation.
- Cooperative HMOs are different from for-profit HMOs, which operate more like insurance processors. Co-op HMOs are not-for-profit health care providers that own medical facilities and employ medical staff.
- Nearly all CO-OPs are structured as true cooperatives and provide a new form of high quality, low cost, and member-governed health insurance in their respective states.
- Cooperative HMOs and CO-OPs devote every dollar of their surpluses to facilities, benefits, and services that are advantageous to their members and communities.
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Farm supply and marketing cooperatives began to formalize in the mid-to-late 19th century and focused on lowering the cost of basic farm production supplies and maximizing farmer profits on the sale of their goods.
- In 1922, the Capper-Volstead Act exempted agricultural cooperatives from antitrust laws that had prohibited producers from collectively processing, preparing, handling, and marketing their own products.
- In addition to providing farm inputs, a number of farm supply co-ops operate convenience stores, grocery and hardware stores, truck stops, car washes, restaurants, and other businesses to meet local needs.
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