Credit Union vs. Banks

What’s the difference?

• Who They Serve. Credit unions have members, not customers. When you deposit money in a credit union, you become a member and your deposit is considered your share of ownership. Also, today many credit union charters allow them to accept anyone as a new member, and not just someone working at a particular company, organization, church or school.

  • Bank customers have no say in how their bank operates, and they’re owned by groups of investors who expect a certain return on their investments.

• Who Runs Them. Credit unions are democratically operated and run by a volunteer board of directors elected by its membership.

  • At banks, only the investors have voting power, while customers don’t have voting rights, cannot be elected to the board, and have no authority in the overall governance of their bank.

• Profit and Non-Profit. Credit unions are not-for-profit, meaning that after expenses are paid and reserves are set aside, surplus earnings are returned to members in the forms of higher dividends, lower loan rates and free or low-cost services.

  • At banks, only investors get a share of the profits.