||Depositors are called
“members.” Each member is part owner
of the credit union. Credit unions may only serve their
members (eligibility to join is determined by a credit
||Banks can serve anyone
in the general public, but their customers have
no ownership interest in the institution. Banks
are owned by investors who may or may not be depositors.
||Credit unions are not-for-profit,
meaning they are in business primarily to serve their
members. If a credit union has excess earnings after reserve
requirements are met, those funds are used to offer the
members lower interest on loans or higher interest on
savings, or to develop new products and services for the
membership. Excess funds can also be paid back to members
in the form of a dividend.
||Banks are for-profit,
meaning their primary purpose is to generate profits for
their investors/stockholders. In banks, only the investors
(stockholders) get a share of the profits.
||Credit unions are democratically
controlled, meaning each member has a
say in how the institution is operated. Credit
unions’ boards are unpaid volunteers elected by
and from the membership. Each member, regardless of how
much money they have on deposit, has one vote in electing
board members. Members can also run for election to the
||At banks, only
investors/stockholders have voting privileges.
Customers don't have voting rights, cannot be elected
to the board, and have no say whatsoever in how their
bank is operated. Bank directors are paid; though they
may not be from the same community the bank is in and
may not even use the bank’s services.
||Credit union accounts
are insured to $100,000 by the National Credit
Union Share Insurance Fund (NCUSIF). The fund is managed
by the National Credit Union Administration, an agency
of the federal government.
||Banks accounts are also
insured to $100,000. Their insurance
fund is called the Federal Deposit Insurance Corp., also
an agency of the federal government.