What’s the difference between a credit union and a bank?
A credit union member is more than a customer. Over 86 million Americans who are credit union members belong to an institution that is unique in the financial world. While there are some similarities between credit unions and banks, certain features are unique to credit unions:
- Cooperative: No one person or organization owns a credit union. It is owned and governed by its members. As a cooperative, it exists solely to provide members with affordable, convenient financial services. Other financial institutions, such as banks are not cooperatives, don’t have members and are owned by individuals or corporate stockholder who may or may not also be the bank’s customers.
- Not-For-Profit: As member-owned cooperatives, credit union earnings, not held as reserves, are returned to members in the form of higher savings rates, lower lending rates, and lower and fewer fees or invested into new products and services.
- Volunteer Driven: The active involvement of member-owners is the cornerstone of the credit union philosophy. A credit union’s policy-making board of directors and many of its committees are made up of individuals elected by the members-all of them unpaid. Credit union member-owners have a direct say in the working of their cooperative because each member has a vote.
Credit unions have worked hard to keep pace with the rapid changes in the financial world. The core values of credit unions remain the same; service to members through cooperative ownership. That makes credit unions unique in the financial world-and an asset to our members’ financial lives.