Credit union - Financial definition
Concise definition of the term credit union
A credit union is a member-owned financial cooperative that provides traditional banking services such as savings accounts, loans, and other financial products to its members.
Comprehensive definition of the term credit union
A credit union operates on the principle of "people helping people," prioritizing member benefits over profit. Unlike traditional banks, credit unions are not-for-profit entities, which often allows them to offer more favorable interest rates and lower fees. Members of a credit union share a common bond, such as employment at the same company or residence in the same community.
Examples of services offered by credit unions include checking and savings accounts, personal and mortgage loans, and credit cards. Market practices within credit unions emphasize member participation in governance, with members having a vote in electing the board of directors. This community-centric approach often results in a strong focus on financial education and community development initiatives.