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A credit union is best described as which of these?
AA profit-seeking bank owned by outside shareholders
BA state agency that insures the deposits of members
CA not-for-profit financial cooperative owned by members
DA lender that funds itself by borrowing from banks
Answer & Solution
Correct answer: C. A not-for-profit financial cooperative owned by members
1. A credit union is a not-for-profit financial cooperative.
2. It is owned by its own members rather than by outside shareholders.
3. It pools the savings of those members in order to make loans and offer services back to them.
4. Because it is member owned and not-for-profit, it is the opposite of a shareholder owned profit-seeking bank.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.3 U.S. Financial Institutions_
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