On 20 February 2026, the Prudential Regulation Authority (PRA) published Policy Statement 5/26 – Credit Union Service Organisations (PS5/26).

Overview

In June 2025, the PRA published a consultation paper (CP13/25) which set out proposed rules and expectations for credit unions who invest or wish to invest in Credit Union Service Organisations (CUSOs). In CP13/25, the PRA proposed to amend the Credit Unions Part of the PRA Rulebook to permit credit unions to invest in CUSOs, a new chapter of PRA Supervisory Statement (SS) 2/23 to mitigate prudential risks inherent in CUSOs and minor amendments to chapter 17 of SS2/23 resulting from the PRA’s proposed deletion of SS20/15.

PS5/26 provides feedback to responses the PRA received from CP13/25 and contains the PRA’s final policy on the amendments to the Credit Unions Part of the PRA Rulebook (Appendix 1) and updates to SS2/23 (Appendix 2 ).

Changes to draft policy

In response to feedback from CP13/25, the PRA has made the following changes to the draft policy. These include:

  • amending the credit union investment rules to provide that credit unions may invest in CUSOs that serve other UK-regulated mutuals (those with Part 4A permission);
  • clarifying that a credit union may partner with non-credit unions to own a CUSO subject to safeguards specified in SS2/23;
  • raising the maximum investment that a credit union can make in a CUSO from 5% to 7.5% of its capital, together with clarifications on the practical application of the limit; and
  • clarifying that credit unions have six months to implement the expectations set out in the CUSOs chapter of SS2/23.

Next steps

The rules will take effect from 20 February 2026. The new Chapter 18 of SS2/32 (Credit Unions that use or own CUSOs) will take effect on 20 August 2026.

The final rules will only affect credit unions which are all mutual institutions and may be of interest to other mutuals that use CUSOs.