Not-for-profit, common-bond financial institutions that are owned by their members are called what?

The correct answer is credit unions, which are unique financial institutions that serve specific groups of people who share a common bond, such as working for the same employer, belonging to the same labor union, or residing in the same community. Credit unions are owned and operated by their members, which means that customers are also stakeholders. This structure allows them to prioritize the needs of their members over profit-making, often resulting in lower fees and better interest rates on loans and deposits when compared to commercial banks.

In addition, credit unions are required to adhere to regulations that emphasize their not-for-profit nature, ensuring that any surplus revenue goes back to the members in the form of improved services or reduced costs rather than distributed as profits to shareholders, as is typical with for-profit institutions like commercial banks. Understanding this distinction is crucial for recognizing the role credit unions play in providing financial services tailored to the needs of their communities.