What we verified in “Credit unions vs. banks: how they differ”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the NCUA (MyCreditUnion.gov), a credit union is a not-for-profit financial institution that accepts deposits, makes loans and provides other financial services; it is owned and controlled by its members and managed by a volunteer board they elect; its profits return to members as reduced fees, higher savings rates and lower loan rates; unlike banks, it returns surplus income to members as dividends; and on average credit unions offer higher savings rates and lower loan rates, and tend to charge lower fees and require lower balances.

   Sources 1 · What is a Credit Union? (MyCreditUnion.gov, NCUA): 'A credit union is a not-for-profit financial institution that accepts deposits, make loans, and provides a wide array of other financial services and products'; 'Credit unions are owned and controlled by their members'; 'Member-elected volunteer board of directors manage credit unions'; 'Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates, and lower loan rates'; 'Unlike banks, credit unions return surplus income to their members in the form of dividends'; 'On average, credit unions offer higher saving rates and lower loan rates'; 'Credit unions also tend to charge lower fees, require lower deposit balances' · Checked October 17, 2026

2. According to the NCUA (MyCreditUnion.gov), credit union members share a common bond, the field of membership, and you may be able to join through your employer, since many employers sponsor their own credit unions; through family, since most credit unions let members' families join; through where you live, work, worship or attend school; or through a group, such as a place of worship, school or labor union.

   Sources 1 · What is a Credit Union?: 'Members of a credit union share a common bond, also known as the credit union's'; 'Many employers sponsor their own credit unions'; 'Most credit unions allow members'; 'families to join'; 'Many credit unions serve anyone that lives, works, worships or attends school in a particular geographic area'; 'Membership in a group, such as a place of worship, school, labor union' · Checked October 17, 2026

3. According to the NCUA (MyCreditUnion.gov), share insurance at a federally insured credit union is automatic when you join, and each member has at least $250,000 in total coverage for share accounts there; federal credit unions are regulated by the NCUA and insured by its fund, backed by the full faith and credit of the United States government; state-chartered credit unions are regulated by their state and may or may not be NCUA-insured, and some have private insurance not backed by the government; a federal credit union's official name must include the words federal credit union; insured credit unions must display the official NCUA sign and may not end federal insurance without notifying members; if unsure, use the Find a Credit Union search; and the NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance, annuities or municipal securities.

   Sources 2 · Share Insurance (MyCreditUnion.gov, NCUA): 'Credit union members do not need to apply for share insurance coverage as it is provided automatically when they join a federally insured credit union'; 'Each credit union member has at least $250,000 in total coverage for share accounts held at a federally insured credit union'; 'Federally chartered credit unions are regulated by the National Credit Union Administration and insured by the NCUSIF which is backed by the full faith and credit of the United States government'; 'State-chartered credit unions are regulated by the state supervisory authority where the credit union's main office is located and may or may not be insured by NCUA'; 'Some deposits at state-chartered credit unions are insured by private insurers'; 'not backed by the full faith and credit of the United States government'; 'its official charter name, which must have the word'; 'Federally insured credit unions must prominently display the official NCUA insurance sign'; 'A credit union may not end its federal insurance without first notifying its members'; 'If you are unsure whether your credit union is federally insured, use our Find a Credit Union function'; 'NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities' · Checked October 17, 2026

4. According to the NCUA, no one has lost a single penny of insured deposits at a federally insured credit union; the fund insures individual accounts up to $250,000 and a member's interest in all joint accounts combined up to $250,000; it does not insure digital assets such as cryptocurrencies; and it is important to confirm your credit union is federally insured using its Credit Union Locator tool.

   Sources 3 · Share Insurance Coverage (NCUA): 'No one has lost a single penny of insured deposits at a federally insured credit union'; 'The Share Insurance Fund insures individual accounts at federally insured credit union up to $250,000, and a member's interest in all joint accounts combined is insured up to $250,000'; 'it does not insure digital assets, such as cryptocurrencies'; 'it's important that members confirm their credit union is federally insured by visiting the NCUA's Credit Union Locator tool' · Checked October 17, 2026

5. According to the FDIC, its insurance protects your money in deposit accounts at FDIC-insured banks if the bank fails; it insures deposits to at least $250,000 per depositor, per ownership category, at each insured bank; its fund is backed by the full faith and credit of the United States government; it covers only deposits and only if your bank is FDIC-insured, which you can check with its BankFind Suite tool; it does not cover non-deposit investment products, even those sold by insured banks; ownership categories include single and joint accounts; its EDIE estimator calculates how much of your money is covered; and it answers questions at 877-275-3342.

   Sources 4 · Understanding Deposit Insurance (FDIC): 'FDIC deposit insurance protects your money in deposit accounts at FDIC-insured banks in the event of a bank failure'; 'insuring deposits to at least $250,000 per depositor, per ownership category at each FDIC-insured bank'; 'The DIF is backed by the full faith and credit of the United States government'; 'FDIC deposit insurance only covers deposits, and only if your bank is FDIC-insured'; 'Make sure your bank is FDIC-insured, using the BankFind Suite search tool'; 'it does not cover non-deposit investment products, even those offered by FDIC-insured banks'; 'Single Accounts'; 'Joint Accounts'; 'Use the FDIC's online Electronic Deposit Insurance Estimator (EDIE)'; '877-275-3342' · Checked October 17, 2026

6. Under Regulation DD (12 CFR §1030.4), a depository institution must give you account disclosures before an account is opened or a service is provided, whichever is earlier, including the amount of any fee that may be imposed (or how it is determined) and the conditions under which it may be imposed.

   Sources 5 · 12 CFR §1030.4(a)(1)(i): 'A depository institution shall provide account disclosures to a consumer before an account is opened or a service is provided, whichever is earlier'; (b)(4): 'The amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed' · Checked October 17, 2026

7. Under the NCUA's rule (12 CFR §707.4), a credit union must give members or potential members account disclosures before an account is opened or a service is provided, whichever is earlier, including the amount of any fee that may be imposed (or how it is determined) and the conditions under which it may be imposed.

   Sources 6 · 12 CFR §707.4(a)(1)(i): 'A credit union must provide account disclosures to a member or potential member before an account is opened or a service is provided, whichever is earlier'; (b)(4): 'The amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed' · Checked October 17, 2026

8. Under Regulation E, the institution holding your account may not charge a fee for paying an ATM or one-time debit card transaction through its overdraft service unless it gives you a written notice describing the service, a reasonable opportunity to opt in, obtains your affirmative consent and confirms it in writing with a statement of your right to revoke it.

   Sources 7 · 12 CFR §1005.17(b)(1): 'shall not assess a fee or charge on a consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, unless the institution'; 'Provides a reasonable opportunity for the consumer to affirmatively consent, or opt in, to the service for ATM and one-time debit card transactions'; 'which includes a statement informing the consumer of the right to revoke such consent' · Checked October 17, 2026

9. Under Regulation E (12 CFR §1005.2), a financial institution means a bank, savings association, credit union or any other person that directly or indirectly holds an account belonging to a consumer.

   Sources 8 · 12 CFR §1005.2(i): 'means a bank, savings association, credit union, or any other person that directly or indirectly holds an account belonging to a consumer' · Checked October 17, 2026

10. According to the NCUA (MyCreditUnion.gov), when you open a checking account the credit union will ask whether you want its overdraft program for one-time debit card and ATM transactions, and if you agree it covers the transaction and charges an overdraft fee listed in its fee schedule and opt-in form; Truth in Savings disclosures list fees such as those for dormant accounts, returned checks or insufficient funds; some institutions reduce fees if you bank electronically; and credit unions also lend to their members.

    Sources 9 · Credit Union Accounts & Services (MyCreditUnion.gov, NCUA): 'When opening a checking account, the credit union will ask whether you wish to join their overdraft program for one-time debit card and ATM transactions'; 'If you agree, the credit union will cover the transaction and impose an overdraft fee, which is detailed in their fee schedule and the opt-in authorization form'; 'such as fees for dormant accounts, returned checks, insufficient funds, and fund deposit procedures'; 'Some financial institutions even offer reductions in fees if you do all your banking electronically'; 'credit unions also provide loans to their members' · Checked October 17, 2026

11. According to the FDIC, to open an account bring your Social Security number or ITIN and an ID such as a driver's license, state or military ID, or passport, and some banks accept other IDs; you may be able to open an account with as little as $25; and many banks let you open an account even if you are not a U.S. citizen, with IDs such as a foreign passport, a consular ID or an ITIN.

    Sources 10 · GetBanked (FDIC): 'Bring your Social Security number or Individual Taxpayer Identification Number (ITIN)'; 'Use your driver's license, state or military ID, or passport to verify your identity'; 'Some banks also accept other forms of ID'; 'you may be able to open a bank account with as little as $25'; FAQ: 'Yes, many banks allow you to open an account even if you're not a U.S. citizen'; 'You might need different forms of identification, like a foreign passport, a consular ID, or Individual Taxpayer Identification Number (ITIN)' · Checked October 17, 2026

12. Under the federal customer identification rule for banks (31 CFR §1020.220), for a non-U.S. person the identification number may be one or more of: a taxpayer identification number; a passport number and country of issuance; an alien identification card number; or the number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.

    Sources 11 · 31 CFR §1020.220(a)(2)(i)(A)(4)(ii): 'For a non-U.S. person, one or more of the following: a taxpayer identification number; passport number and country of issuance; alien identification card number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard' · Checked October 17, 2026

13. In a legal opinion about a plan to help members without Social Security numbers establish a credit history, the NCUA answered whether a federal credit union may lend to members who use an ITIN and the matricula consular or a state ID instead of a Social Security number: it saw no legal impediment, although the credit union must identify and address the risks; and, regarding a plan to report borrower activity to credit reporting agencies, it said it knew of no law that prohibits a creditor from reporting borrower data by an identification number other than the Social Security number.

    Sources 12 · NCUA Legal Opinion, Individual Taxpayer Identification and Matricula Consular Numbers for Credit Reporting Purposes: 'asks if it permissible for a federal credit union (FCU) to provide lending services to members who use individual taxpayer identification numbers (ITINs) and the matricula consular identification card or state identification card, rather than a social security number'; 'We see no legal impediment to this plan, but note an FCU must be sure to identify and address any risks associated with this initiative'; 'approved a plan to assist members who lack social security numbers in establishing a credit history'; 'report borrower activity to credit reporting agencies'; 'We are aware of no law that prohibits a creditor from reporting borrower data by an identification number other than the social security number' · Checked October 17, 2026

14. Under the NCUA's rule (12 CFR §701.21(c)(7)(iii)), a federal credit union may offer payday alternative loans (PAL I) on conditions including: $200 to $1,000; a term of one to six months; no more than three in a rolling six months to one borrower and no more than one at a time; no rollovers; fully amortized; the borrower must be a member for at least one month first; and the application fee must reflect actual processing costs and never exceed $20.

    Sources 13 · 12 CFR §701.21(c)(7)(iii)(A)(1)–(7): 'The principal of the payday alternative loan is not less than $200 or more than $1,000'; 'The payday alternative loan has a minimum maturity of one month and a maximum maturity of six months'; 'does not make more than three payday alternative loans'; 'in any rolling six-month period to any one borrower and does not make more than one payday alternative loan'; 'at a time to any borrower'; 'The federal credit union does not rollover any payday alternative loan'; 'The federal credit union fully amortizes the payday alternative loan'; 'requires the borrower to be a member of the credit union for at least one month before receiving a payday alternative loan'; 'that reflects the actual costs associated with processing the application, but that in no case exceeds $20' · Checked October 17, 2026

15. According to the Treasury's CDFI Fund, CDFI (Community Development Financial Institution) certification is given to specialized organizations that provide financial services in low-income communities and to people who lack access to financing; CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated ones such as loan funds; there are certified CDFIs in all 50 states, the District of Columbia, Guam and Puerto Rico; the Fund publishes the list of certified CDFIs; and its awards finance activities including mortgage lending for first-time homebuyers.

    Sources 14 · CDFI Certification (CDFI Fund, U.S. Department of the Treasury): 'Community Development Financial Institution (CDFI) Certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing'; 'CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated institutions like loan and venture capital funds'; 'There are Certified CDFIs in all 50 states, the District of Columbia, Guam, and Puerto Rico'; 'List of Currently Certified CDFIs'; 'including mortgage lending for first-time homebuyers' · Checked October 17, 2026

16. According to the NCUA, its Consumer Assistance Center (CAC) helps resolve disputes with credit unions; it recommends trying to resolve the dispute directly with your credit union first; and when it can help, it asks the credit union to try to resolve the complaint within 60 calendar days.

    Sources 15 · Complaint Process (MyCreditUnion.gov, NCUA): 'Consumer Assistance Center (CAC) assists consumers in resolving disputes with credit unions'; 'we recommend trying to resolve the dispute directly with your credit union'; 'We request the credit union attempt to resolve your complaint within 60 calendar days' · Checked October 17, 2026

17. According to the CFPB, housing counselors throughout the country provide advice on buying a home, renting, defaults, foreclosures and credit issues, and their advice is independent, often at little or no cost.

    Sources 16 · Find a Housing Counselor (CFPB): 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026