There are differences among prudential regulations of Korea's cooperative financial institutions such as Credit Unions, Agricultural·Fisheries· Forestry Cooperatives and Community Credit Cooperatives. It is because they are established under different laws and are regulated by different authorities including Ministry for Food, Agriculture, Forestry and Fisheries, Korea Forest Service, Ministry of Public Administration and Security, Financial Services Commission, and Financial Supervisory Service. Applying different regulations could deteriorate the overall competitiveness of the industry by stifling fair competition between cooperative financial institutions, which conduct similar business activities. In this paper, we noted these potential problems and explored ways for improvement, especially in the area of prudential regulations. First, we can find differences among the regulations in computation of several management guidance ratios. For Net Capital Ratio, the main prudential indicator, the limits on investment money and bad debt allowance are different. Also, when cooperative financial institutions calculate loan overdue rates, different standards are applied. Therefore, it is hard to evaluate and compare their soundness only with these indicators. Besides that, it was found that different methods are applied for calculating required reserves. In particular, there are remarkable differences in business regulations, such as investment and management of spare cash, limit on loans per person, limit on loans per non-member between Credit Unions, Agricultural·Fisheries· Forestry Cooperatives and Community Credit Cooperatives. In case of Credit Unions and Agricultural·Fisheries·Forestry Cooperatives, which are directly supervised by financial supervisory authorities, more strict business regulations are applied. On the contrary, Community Credit Cooperatives, which are supervised by the Ministry of Public Administration and Security, less strict regulations are applied. Differing prudential regulations of cooperative financial institutions is against the principle of "the same market, the same regulation." It can undermine competition and make it hard for regulatory authorities to establish appropriate policy responses. Futhermore, dispersion of supervisory authorities can also stifle competition and create market inefficiencies. Going forward, it is necessary to reconcile differences in prudential regulations legislatively and unify different supervisory authorities into one. Futhermore, cooperative financial institutions will be able to achieve sustainable growth only when they take a step further from their traditional functions to act as a financial institution serving people with low income and low credit ratings.