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Credit unions are nonprofit and owned by their members, while banks are publicly held corporations. In a credit union, the money made from loan interests is distributed amongst its members as dividends. Because credit unions don't face the same federal regulations as banks, they are often able to offer cheaper loans. Fortunately for investors, accounts are insured by the government, just like at banks. According to Cinco Credit Union, there are currently just over 11,000 credit unions in the United States. Credit unions first appeared in Europe during the mid-19th century. Originally, they were a way for working organizations, or
guilds, to store capital and fund new projects. Most of the relevant information on banks vs. credit unions comes from credit unions, so the debate is fairly one-sided. But there's no arguing that credit unions have become an increasingly popular alternative to banks -- over 70 million Americans belong to one.
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