When you walk into a credit union, it may seem like they speak a different language. Checking accounts are “share draft accounts” and customers are called "members". Is there really any difference between banks and credit unions if you’re a credit union member?
It really depends on the credit union; you might feel like you get treated the same by your bank and your credit union. However, there are some differences in how credit unions and banks are designed, which affect your experience as a member.
The main difference between credit union members and bank customers is ownership: credit union members own the credit union. By opening an account and making a deposit, you own a share of the institution. Banks, on the other hand, are businesses that may be owned by individuals, other companies, or shareholders.
Credit unions claim that this ownership structure benefits credit union members; nobody from outside is pressuring management to do things that might not benefit the members. Decisions are ideally made for the benefit of all members. Different members may have different interests, which brings us to the next feature of credit union membership.
Credit union members also have the right to vote and influence the direction of their credit union. A credit union is led by a board of directors (all of whom must be members themselves), which is elected by the credit union membership. If you want things to change at your credit union, vote for a board member that shares your philosophy.
Each member gets one vote; votes are not allotted depending on how much you keep at the credit union. As a result, all credit union members have an equal voice when voting.
Membership in general -- in any group -- suggests some type of common bond. Credit union membership is similar: everybody shares something in common. This may or may not matter to you as a customer at a financial institution, but it does make credit unions unique.
To become a member at a credit union, you have to qualify. Credit unions can only accept customers who are part of the “field of membership” -- people who meet certain criteria. In many cases, you qualify because of where you live, where you work, or your membership in another group.