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Posted September 14, 2009 in Blog by Ryan

Members own the credit union

The main selling point that credit unions use to promote membership is the idea that members own the business. Not only does that mean that members have democratic control of the institution, but they are also entitled to surplus revenue or profit.

Banks have shareholders, who own it, receive a share of the profits, and have ultimate authority over the corporation. Because of this structure, banks have an additional obligation to their shareholders while they try to serve their customers.

The difference is illustrated in this graphic comparing a bank’s structure to that of a credit union.

graphic comparing a credit union to a bank
(graphic created by Ben Kendall at Drive Creative)

In a credit union, the members are entitled to all profits, compared to a bank where others take a cut. That difference is one we will leverage in working to set up a student credit union and offer more value to students.

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