Frequently Asked Questions

A member-owned financial cooperative is a financial institution owned and governed by the people who use its services. Credit unions are the most common example. When you open an account, you become a member-owner with a voice in how the institution is run.

The biggest difference is ownership. Banks are typically owned by shareholders and have an obligation to maximize profits for investors. Credit unions are owned by their members and focus on providing value—like better rates, lower fees, and strong service—to the people who use them.

Yes. Ownership affects priorities. Because members are the owners, leadership is accountable to them. Earnings are reinvested to benefit members rather than paid out to external shareholders. Governance is democratic, with members able to vote for board leadership.

In most cases, yes. Credit unions typically offer checking and savings accounts, loans, credit cards, online and mobile banking, and other everyday financial services. Availability may vary by institution, but the core services are similar.

Yes. Federally insured credit unions are regulated and insured by the National Credit Union Administration (NCUA), which protects deposits up to $250k per depositor, per credit union, for each ownership category as bank deposit insurance. Safety and soundness are core priorities of the cooperative model.

Because they don’t have to generate profits for outside shareholders, surplus earnings are returned to members through better rates, lower fees, improved services, or reinvestment in the institution’s long-term stability.

Eligibility depends on the credit union. Some serve specific communities, employers, geographic areas, or groups. Many credit unions have broad eligibility, and consumers are often surprised by how easy it is to qualify for membership.

Credit unions are not nonprofits, but they are not-for-profit. This means they exist to serve their members rather than to maximize profit. They still need to earn enough to operate safely and sustainably—but earnings are used to benefit members.

Member-owned financial institutions tend to reinvest locally, support small businesses, and prioritize long-term community stability. Because they are rooted in the communities they serve, their success is closely tied to member and local well-being.

It depends on individual needs and preferences. Member-owned cooperatives offer a community-focused, member-driven alternative to traditional banking. Understanding how ownership works can help consumers decide whether this model aligns with their financial goals.