Credit Union Difference Chart

More about the Credit Union Difference

To the typical person, most financial institutions seem pretty much alike at first. Although, it’s true that credit unions offer many of the same financial products and services as other institutions, but that is where the similarity ends. There are some important differences that set credit unions apart and benefit credit union members throughout Arizona and throughout the world.

Credit Unions vs. other financial institutions What’s the Difference?
	Credit Unions	Other financial institutions
Depositors	Member/Owner Depositors are called “members.” Each member holds an equal share of ownership in the credit union regardless of the size of their accounts. Credit unions may only serve their members (eligibility to join is determined by a credit union’s state of federal charter).	Customer Other financial institutions can serve anyone in the general public, but their customers have no ownership interest in the institution. Other financial institutions are owned by investors who may or may not be depositors.
Structure	Not-for-Profit/Cooperative Credit unions are not-for-profit, cooperative financial institutions, meaning any excess earnings after reserve requirements are met are re-issued back to the members in the form of better interest rates and lower fees. Earnings may also be used to develop new products and services for the membership and also be paid back to members in the form of a dividend.	For-Profit Other financial institutions are for-profit, meaning their primary purpose is to generate profits for their investors/stockholders. In other financial institutions, only the investors (stockholders) receive a share of the profits.
Governance	Volunteer-Driven, Democratically Controlled Credit unions are democratically controlled, meaning 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 board. Statewide over 2,000 people volunteer to serve on credit union boards and committees.	Corporate/Stockholder Controlled At other financial institutions, only the investors or stockholders have voting privileges. Customers don’t have voting rights, cannot be elected to the board, and have no say whatsoever in how their financial institution is operated. 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.
Earnings	Returned to Members (You) Credit unions return earnings to members through higher savings interest rates, lower loan rates, as well as, by assessing fewer and lower fees.	Distributed to Shareholders (Not You) Other financial Institutions are profit-driven and distribute that profit among the shareholders. These shareholders may or may not be customers of the bank.
Purpose	Social Purpose People Helping People. Credit unions exist to help people, not make a profit. Our goal is to serve all of our members well, including those of modest means. That’s why Arizona’s credit unions provide REAL Solutions, For People Like You.	Financial Purpose Other financial institutions exist to serve the financial interest of the top few shareholders.