PRA clarifies that Credit Unions may invest in service organisations

The PRA has published its policy statement amending the credit union investment rules to provide that credit unions may invest in credit union service organisations (CUSOs) subject to certain conditions.

The changes will also clarify that a credit union may partner with non-credit unions to own a CUSO, set safeguards to manage the expansion of CUSO scope, and raise the maximum investment that a credit union can make in a CUSO from 5 to 7.5% of its capital.

Respondents broadly welcomed the PRA’s proposals, and appreciated the need to provide clarity on the issue, and facilitate innovation and sustainability through the expansion of CUSOs, and allowing credit union investments in them.