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.