Laura WilesLaura Wallis – PRA Director of UK Deposit Takers – has written a letter setting out the PRA’s approach to Credit Union Service Organisations (CUSOs).
The PRA has observed increased interest from credit unions (CUs) seeking to establish CUSOs. The letter aims to clarify the application of the regulatory framework in respect of CUs that hold an investment in, or are users of, CUSOs.
Whether a CU’s use of a CUSO is permitted will depend on how the CUSO is established and funded. Later this year, the PRA will be consulting on:
- amending its rules to clarify that investment of surplus funds in CUSOs are permitted (where the investment meets legislative requirements); and
- expectations for CUs that invest in and / or use CUSOs.
The PRA will be contacting CUs already investing in a CUSO to ensure they are doing so in compliance with current regulation. It may use temporary rule modifications to ensure compliance.