A 

credit union, a type of financial institution similar to a commercial bank, is a member-owned

financial cooperative, controlled by its members and operated on a not-for-profit basis. Credit unions
generally provide services to members similar to retail banks, including deposit accounts, provision
of credit, and other financial services.[1][2] In several African countries, credit unions are commonly
referred to as SACCOs (Savings and Credit Co-Operative Societies). [3]
Worldwide, credit union systems vary significantly in terms of total assets and average institution
asset size, ranging from volunteer operations with a handful of members to institutions with
hundreds of thousands of members and assets worth billions of US dollars.[4] In 2018 the number of
members in credit unions worldwide was 274 million, with nearly 40 million members being added
since 2016.[5]
Leading up to the financial crisis of 2007–2008, commercial banks engaged in approximately five
times more subprime lending relative to credit unions and were two and a half times more likely to
fail during the crisis.[6] American credit unions more than doubled lending to small businesses
between 2008 and 2016, from $30 billion to $60 billion, while lending to small businesses overall
during the same period declined by around $100 billion.[7] In the US, public trust in credit unions
stands at 60%, compared to 30% for big banks.[8] Furthermore, small businesses are 80% less likely
to be dissatisfied with a credit union than with a big bank.[9]
"Natural-person credit unions" (also called "retail credit unions" or "consumer credit unions") serve
individuals, as distinguished from "corporate credit unions", which serve other credit unions.[10][11][12]
Credit unions differ from banks and other financial institutions in that those who have accounts in the
credit union are its members and owners,[1] and they elect their board of directors in a one-person-
one-vote system regardless of their amount invested.[1] Credit unions see themselves as different
from mainstream banks, with a mission to be "community-oriented" and "serve people, not profit".[13][14]
[15]

Credit unions offer many of the same financial services as banks but often use different terminology.
Typical services include share accounts (savings accounts), share draft accounts (cheque
accounts), credit cards, share term certificates (certificates of deposit), and online banking. Normally,
only a member of a credit union may deposit or borrow money.[1] Surveys of customers at banks and
credit unions have consistently shown significantly higher customer satisfaction rates with the quality
of service at credit unions.[16][17] Credit unions have historically claimed to provide superior member
service and to be committed to helping members improve their financial situation. In the context
of financial inclusion, credit unions claim to provide a broader range of loan and savings products at
a much cheaper cost to their members than do most microfinance institutions.[18]
Credit unions differ from modern microfinance. Particularly, members’ control over financial
resources is the distinguishing feature between the cooperative model and modern microfinance.
The current dominant model of microfinance, whether it is provided by not-for-profit or for-profit
institutions, places the control over financial resources and their allocation in the hands of a small
number of microfinance providers that benefit from the highly profitable sector.[19]

In the credit union context, "not-for-profit" must be distinguished from a charity.[20] Credit unions are
"not-for-profit" because their purpose is to serve their members rather than to maximize profits,[18]
[20]
 so unlike charities, credit unions do not rely on donations and are financial institutions that must
make what is, in economic terms, a small profit (i.e., in non-profit accounting terms, a "surplus") to
remain in existence.[18][21] According to the World Council of Credit Unions (WOCCU), a credit
union's revenues (from loans and investments) must exceed its operating expenses
and dividends (interest paid on deposits) in order to maintain capital and solvency.[21]
In the United States, credit unions incorporated and operating under a state credit union law are tax-
exempt under Section 501(c)(14)(A).[22] Federal credit unions organized and operated in accordance
with the Federal Credit Union Act are tax-exempt under Section 501(c)(1).[23]