Credit unions are nonprofit institutions owned and controlled by members of the union that provide loan and savings services to members. Unlike banks, credit unions are controlled by the account holders (members) of the union, and the union may have standards for who can join the credit union. Also, members who meet certain requirements can vote on the leadership of the union. Because credit unions are nonprofits and limit surplus services, members receive lower interest rates for loans and higher returns on savings accounts than at a regular banking institution. Accounts at credit unions receive the same FDIC insurance coverage as qualifying banks do.
[Last updated in July of 2021 by the Wex Definitions Team]