A credit union is a not-for-profit financial cooperative that is owned by its members. Operating under the philosophy of “not for charity, not for profit, but for service”, credit unions exist for an entirely different purpose than banks. Here are the primary differences between credit unions and banks:

Member-Owner, Not Customers

At a credit union, you must be eligible to join through the credit union’s field of membership, which makes you a member, not a customer. A credit union’s field of membership can be a geographical area, or it can be groups of employees and their families. You are also an owner at your credit union. Credit unions have no stockholders, rather a member’s deposits are his or her shares in the credit union.

Not-For-Profit

Because there are no stockholders to pay, credit unions return their profits to the membership. Profit is returned in the form of new and low-cost services, lower loan rates, and higher dividend dates. The not-for-profit status has traditionally allowed credit unions to be a better deal!

“People Helping People”

Each credit union was founded by a group of people who pooled together their money to lend to one another at a lower rate of interest. Credit unions operate for the purpose of serving the financial needs of the members and helping them achieve personal goals, and all operating decisions are made from the perspective of the best interest of the members.

Volunteer Leadership

The operations of a credit union are overseen by a volunteer Board of Directors that is comprised of credit union members. Without the influence of salary, the Board of Directors is free to provide impartial leadership that is in the best interest of their fellow members.

One Member, One Equal Vote