What is the difference between a bank and a credit union?

The primary difference between a bank and a credit union is that banks are for-profit entities, while credit unions are not-for-profit entities. Banks are owned by shareholders who are looking for a return on investment, while credit unions are owned by members who pay for services and don’t receive any dividends. Banks are regulated by the federal government and often offer a wider range of services than credit unions. Banks typically require a borrower to have higher credit scores and larger deposits than would be necessary for a credit union loan. Banks are in the business of making money, so they usually charge customers more fees than a credit union. Credit unions, on the other hand, may offer lower fees and higher interest rates on loans and deposits because they are not out to make a profit. In South Carolina, both banks and credit unions must be licensed and regulated by the state government. Banks must also be licensed and regulated by the federal government. Banks in South Carolina are subject to the laws and regulations of their respective federal government agencies, such as the Federal Deposit Insurance Corporation (FDIC). Credit unions, conversely, are subject to the laws and regulations of their respective state chartering authority, such the South Carolina Department of Consumer Affairs.

Related FAQs

What is the Payment Card Industry Data Security Standard?
What is the Home Affordable Foreclosure Alternatives Program?
What is the Fair Lending Act?
What is the Gramm-Leach-Bliley Act?
What is the Federal Banking Agency Regulatory Relief Act?
What is the Truth in Savings Act?
What is the Real Estate Settlement Procedures Act?
Are there any regulations governing ATM use?
What is the Equal Credit Opportunity Act?
What are the general principles of banking law?

What is the difference between a bank and a credit union?

Related FAQs

Related Blog Posts