- On 20 February 2026, the PRA released PS 5/26: Credit Union Service Organisations (CUSO). It follows consultation paper 13/25 which was released last year. The policy statement makes changes to the Credit Union rulebook and SS2/23.
The Credit Union rulebook now allows Credit Unions to invest in an entity to allow it to provide ancillary services exclusively to credit unions, their members and other mutual societies. The PRA then set out the rules and expectations in relation to CUSOs within a new Chapter 18 in Supervisory Statement 2/23.
SS2/23 reminds Credit Unions that the prohibition on Credit Unions having subsidiaries remains. It also covers a number of areas including:
- Investing in a Credit Union– The PRA state they would expect at least one of the CUSO’s Directors to be from the Credit Union. The Credit Union should be setting out the intended governance, how the CUSO will be funded and how the Credit Union is satisfied its liability is restricted to the level of the investment. The PRA have also set out areas where they may expect further information such as the reporting structure, the Credit Union has oversight of the CUSO business plan, risk strategy and exit plans. The PRA also set out expectations where the other investor in CUSO is not a credit union and where services are being provided to other mutuals (or their members).
- Limiting the Liability of the Credit Union– No more than 7.5% of the Credit Union’s capital (as measured immediately before investment) should be invested in CUSOs. As mentioned above the PRA expects that the Credit Union has steps in place to ensure that its liability is not more than the level of investment. They have also stated that the CUSO’s accounts should be available to the PRA on request. The Credit Union should ensure that it, its advisors and the PRA have unrestricted access to financial records of the CUSO.
- Credit Union who already have a CUSO investment– These Credit Unions should be reviewing the rules and considering any areas of non-compliance with the new CUSO rules. Where there are areas of non-compliance then the Credit Union may require to submit a mitigation plan to the PRA.
- Outsourcing expectations- The fact that the Credit Union may part own the CUSO does not impact the Credit Union’s existing responsibilities when it comes to outsourcing. In addition, the Credit Unions are expected to have a policy on how they will supervise the CUSO and manage any risks.