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

The primary difference between a bank and a credit union is ownership structure. Banks are owned by shareholders who expect a return on their investment and are operated to maximize profits for those shareholders. Credit unions, on the other hand, are owned by their members and profits are returned to members in the form of dividends. The second difference between banks and credit unions revolves around customer service. Banks are typically more focused on profit-making than customer service. Credit unions, however, often have a greater focus on customer service and personal relationships between the customer and staff. In terms of regulations, banks are regulated at both the federal and state levels, while credit unions are regulated by the federal government through the National Credit Union Administration. The rules and regulations for banks may differ from state to state, while credit unions must abide by federal regulations. In terms of services, banks typically offer a wider variety of services than credit unions, including investment products and services, foreign exchange trading, and other services. Credit unions typically only offer basic banking services such as checking, savings, and loans. Finally, banks are typically larger than credit unions and may have hundreds of branches, while credit unions are typically smaller and may only have one or two branches. Credit unions also tend to offer lower interest rates on loans and deposits than banks, although the difference is often small.

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