What is a key difference between a credit union and a bank?

The correct answer highlights that credit unions are member-owned and not-for-profit institutions. This structure significantly differentiates credit unions from banks. Credit unions operate to serve their members rather than to maximize profits, which is a primary focus of for-profit banks. The funds generated by a credit union are typically reinvested into the organization to benefit members through lower fees, better interest rates, and additional services.

In contrast, banks prioritize profit generation for their shareholders, putting them in a fundamentally different operational category. The unique aspect of member ownership in credit unions fosters a community-oriented culture, where decisions are made with the best interest of members in mind, rather than external investors. This model often results in a more personal and customer-focused banking experience.