A credit union is a financial cooperative that is owned and operated by its members, who are also its customers. The primary purpose of a credit union is to provide financial services, such as savings and loan products, to its members. Credit unions are not-for-profit entities, and any profits generated are typically returned to members in the form of lower fees, higher interest rates on deposits, and better loan terms.

Key features of credit unions include:

1. **Membership-Based:**
– Credit unions operate on a membership basis. To become a member, individuals typically need to share a common bond, such as working for the same employer, belonging to the same community, or being affiliated with a particular organization or association.

2. **Ownership by Members:**
– Members of a credit union are also considered owners. Each member, regardless of the amount of money they have on deposit, has one vote in the decision-making process, regardless of the size of their financial investment in the credit union.

3. **Not-for-Profit Structure:**
– Unlike traditional banks, credit unions are not-for-profit entities. Any profits generated are used to provide better services to members, including higher interest rates on savings, lower interest rates on loans, and minimal fees.

4. **Board of Directors:**
– Credit unions are governed by a board of directors elected by the members. The board oversees the credit union’s operations and ensures that it operates in the best interests of its members.

5. **Financial Services:**
– Credit unions offer a range of financial services, including savings and checking accounts, loans (such as personal loans, auto loans, and mortgages), credit cards, and other financial products. Some credit unions also provide services such as insurance and investment products.

6. **Community Focus:**
– Many credit unions have a strong community focus. They may provide financial education, support local community initiatives, and work to address the specific financial needs of their members.

7. **Membership Eligibility:**
– Membership eligibility criteria can vary among credit unions. Some credit unions are open to individuals within a specific geographic area, while others may be limited to employees of a particular company or members of a specific organization.

8. **Regulation:**
– Credit unions are regulated financial institutions, and their operations are overseen by government agencies. In the United States, for example, credit unions are regulated by the National Credit Union Administration (NCUA).

Credit unions are known for their emphasis on member service, community involvement, and a cooperative structure that aligns the interests of the institution with the interests of its members. While credit unions may have a more limited geographic presence compared to large banks, they often provide competitive financial products and services with a focus on serving the needs of their members.