Which factor differentiates a bank’s structure from that of a credit union?

The primary factor that differentiates a bank's structure from that of a credit union is ownership. Banks are typically owned by shareholders who invest in the institution and expect to earn a profit from their investment. In contrast, credit unions are owned by their members, who are also the customers. This member-owned structure allows credit unions to operate not for profit but for the benefit of their members, often resulting in lower fees and better interest rates on loans and deposits compared to traditional banks.

The emphasis on ownership helps clarify the fundamental differences in how these institutions operate and make decisions. In a bank, the focus is generally on profit maximization for shareholders, while a credit union prioritizes the financial well-being of its members. This key distinction shapes various aspects of their operations, including how profits are used, lending practices, and customer service approach.