All credit unions provide shared banking because members are part owners who receive shares of surplus income through dividends, reports the National Credit Union Administration Office of Consumer Protection. Members not only share in credit union profits but also elect the board of directors who runs the credit union.Continue Reading
Although credit unions and banks offer similar services, banks are owned by and accountable to shareholders and treat those who use their services as customers, while credit union members are the shareholders of the credit union, according to Justin Pritchard for About.com. Credit union deposits are known as shares because they are similar to shares of stock in a bank or business organization. Credit unions typically limit membership to specific fields of employment, religion, community, organization or geographical area. Because some credit unions are smaller than banks, they do not always offer all the services banks offer.
Because credit unions are not-for-profit organizations set up to serve their members, they are able to offer fairly priced financial products, low interest rates and fewer fees, reports the National Credit Union Administration. Additionally, credit unions usually have no requirements for minimum balances for members. The U.S. government insures the deposits of most credit unions through the National Credit Union Share Insurance Fund administered by the National Credit Union Administration.Learn more about Credit & Lending