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Q: How is a credit union different from a regular bank?
A credit union is a non-profit organization, founded to serve a specific membership or group. You can join the credit union only if you are a member of the group it serves. When you join a credit union, you are considered a member rather than a customer. As a member, you have voting privileges when electing the board of directors and a say in how the credit union operates. Credit unions do not answer to stockholders, but rather to their members. When a credit union is profitable, the profits go to members in the form of dividends rather than paying dividends to stockholders who may or may not be customers of the bank. Credit unions typically offer more favorable interest rates on loans and savings accounts than banks, and they charge fewer fees.
A bank is generally run by a group of investors and the bank exists to make money for those investors and anyone else who holds stock in the bank. Because a bank is more profit driven than a credit union, it generally offers lower interest rates on savings, higher interest rates on loans and charge more fees. Anyone may open an account at a bank, but you are a customer of the bank, not a member. You have no voting privileges or say in how the bank operates.
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