The type of financial institution that is owned by its members is called a credit union. Credit unions are nonprofit financial cooperatives created, owned, and operated by their members. Members pool their money to provide loans, savings accounts, and other financial services to each other. Unlike banks, credit unions do not have shareholders; instead, the members are the owners and have equal voting rights regardless of the amount of money they have deposited. Profits generated by credit unions are returned to members in the form of lower fees, better interest rates, and improved services. They are governed by a board of directors elected from among the members and prioritize serving the financial well-being of their members rather than maximizing profits
. In summary, credit unions are member-owned, nonprofit financial institutions that operate on a cooperative basis to serve their members' financial needs.
