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Question

What distinguishes a credit union from a commercial bank?

A Credit unions are owned by their members, while commercial banks are owned by shareholders. Correct Answer Incorrect Answer
B Credit unions focus on serving corporate clients, while commercial banks primarily serve individual customers. Correct Answer Incorrect Answer
C Credit unions are regulated by the central bank, while commercial banks are regulated by government agencies. Correct Answer Incorrect Answer
D Credit unions provide investment banking services, while commercial banks focus on retail banking. Correct Answer Incorrect Answer
E Credit unions have higher interest rates on loans compared to commercial banks. Correct Answer Incorrect Answer

Solution

Credit unions are financial cooperatives that are owned and operated by their members, who are typically individuals with a common bond such as belonging to the same community or workplace. In contrast, commercial banks are typically owned by shareholders and operate for-profit. Credit unions often offer similar services as commercial banks, such as savings accounts, loans, and other financial products, but their ownership structure sets them apart.  

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