This—the ownership structure—is a key difference between credit unions and banks. Stockholders own banks. Customers own credit unions[4], but customers at credit unions are more correctly called “member-owners,” or just “members.” This is true for all credit unions, regardless of size, product suite, or location in the USA.

So, member-owners own credit unions, stockholders own banks.

This fundamental, structural difference leads to other significant differences between banks and credit unions. Yet, because effective delivery of retail financial services leads to similar service delivery by banks and credit unions, it’s easy for a shallow review of banks and credit unions to miss some of the differences between the two.

Some of the differences that arise from the customers being owners are:

Bankers like to employ the idea that if it walks and talks like a duck, it’s a duck. From the street, a credit union looks like a bank, therefore . . . .

Well, yes. A credit union is a financial institution. So, from the street, it looks like a bank. However, it’s a different kind of financial institutions. A cooperative financial institution. A bank is a for-profit financial institution.

As it turns out, there are 130+ kinds of ducks. Mallards, canvasbacks, ruddy ducks, redhead ducks, buffleheads, hooded mergansers, and many, many more.

There are also many kinds of financial institutions, and they’re all different. Credit unions happen to be cooperative financial institutions, which makes quite a large difference in the end.