Are credit unions different from for-profit financial institutions?
Regardless of their size or field of membership, credit unions are different than for-profit financial institutions. Credit unions exist to serve their members. For-profit financial institutions exist to make money for their stockholders.
Credit unions are member-owned, cooperative financial institutions that provide similar financial services such as savings and checking accounts, youth and senior accounts, loans for a variety of purposes, insurance, convenient services to access and send funds and more. In essence they are mutual organizations operated entirely by and for their members.
While for-profit institutions must make profits for their shareholders, in a credit union any earnings in excess of operational costs are returned to the members in the form of increased interest on savings, decreased rates on loans or other new and improved services.
Unlike for-profit financial institutions, credit unions return any profits to members, in the form of higher dividends on savings, lower fees, lower rates on loans, and expanded services.
Posted in: General Information