Unlike for-profit banks, credit unions function democratically.[1] They’re democratic cooperatives[2], owned and controlled by their members—the same people who are customers.

Regardless of the size or scope of a credit union, it has a board of directors, which governs the institution’s policies and strategy. Directors are elected from among the membership. Each adult member in good standing has the option to try and gain a seat on the board.

How do they gain a seat? They are elected. Who elects them? Other members.

Elections at credit unions are democratic, meaning each member gets an equal number of votes: one. That vote is tied to the membership in the credit union, not to the amount of deposits or loans the member has. Through these votes, the credit union members hold governing power. They direct the credit union through their elected representatives—the directors[3], much like the government across the United States.

Members of the board of directors represent members and are elected by the membership. Board members share in the responsibility for the credit union’s future by setting policies, approving budgets, and performing all the other functions that guide the credit union.[4]

Conversely, at a bank, being a customer isn’t enough to have a say in the governance of the bank—you must buy stock in order to get a vote, and votes are associated with pieces of stock, not with individual people.

Individual owners of banks can hold many pieces of stock, and therefore vote many times. For instance, someone with 1,000,000 shares gets 1,000,000 votes; someone with 1 share gets 1 vote.[5] In this manner, it’s possible for one person or a small group of people to completely control the bank.

That’s not the case at a credit union! If you have $1,000,000 in the credit union, or $5—you get 1 vote! It’s democratized financial services!