Are Credit Unions Less Efficient than Commercial Banks? An Empirical Analysis of Operating Efficiency

Credit Unions are different from banks. They have a different legal structure and a different purpose. Measuring their performance should be done in a way that fully considers their structure and purpose. This research focuses on the common misunderstandings of CUs. The literature review reveals with some detail how Credit Unions are different than banks. The consideration of ROA and ROE as they relate to Credit Unions is discussed. The empirical evidence presented focuses on operating efficiencies of CUs vs banks. The evidence shows that while Credit Unions are often criticized for being less efficient, their operating efficiency is actually not statistically significantly different than that of comparable sized commercial banks.