USE Credit Union

What is the Difference Between Credit Unions and Banks?

Credit unions and banks are both financial institutions and provide similar services to their consumers.  Take a look at the chart below to see a summary of some of the key differences between these entities:

Credit Unions


  • Not-for-profit cooperative
  • For profit entity
  • Owned by members of the credit union. Each member owns one “share” of the credit union and, thus, has equal voting rights for decisions regarding the credit union.
  • Owned by stockholders. Bank stockholders make decisions, not the account holders of the bank. Accounts holders own accounts, not membership rights.
  • Membership is based on a charter, based on a common bond. For example, all employees of a school district are eligible for a credit union based on the common bond of being an employee within that school district. Other examples of common bonds are businesses, communities, and associations.
  • Anyone can be a customer of a bank as long as they meet specific standards recognized by the bank and can provide the required identification.
  • Operated mostly by volunteer boards and committees, which direct management and other employees.
  • Board of Directors are paid based on the profits generated by the bank.
  • Credit unions are tax-exempt organizations.
  • Banks pay taxes in various ways and for various reasons.
  • Dividends are paid directly back to members in the form of higher rates on savings or lower rates on loans.
  • Offer products and services with provisions for profits. Interest is not necessarily given directly back to customers.
  • All federally-chartered credit unions and most state-chartered credit unions are insured by the NCUSIF, a division of the federal government.
  • All banks are insured by the FDIC, a division of the federal government.


At USE Credit Union, we’re committed to being your trusted financial partner.  To learn more about our products and services, click through to our home page, call our Contact Center at 866.873.4968, or stop by one of our nearby branches.

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