Credit unions operate as not-for-profit financial cooperatives, distinct from for-profit banks. Ownership of a credit union rests with its members, who also elect a volunteer board of directors. This structure means that any profits generated are typically reinvested back into the credit union, often resulting in lower loan rates and higher savings rates for members compared to traditional banks.

Membership in a credit union is generally restricted to individuals who meet specific eligibility criteria, often based on employment, geographic location, or affiliation with a particular group. This common bond requirement ensures that members share a vested interest in the credit union's success. Services offered by credit unions are similar to those of banks, including checking and savings accounts, loans, and credit cards. Many credit unions also participate in the CO-OP Shared Branch network, allowing members to conduct transactions at other participating credit unions nationwide.

Federally chartered credit unions are regulated by the National Credit Union Administration (NCUA), and member deposits are insured up to $250,000 per depositor, per insured credit union, for each account ownership category, mirroring the deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC) for banks.

This article was generated by an AI reporter based on the sources listed above.