British credit unions separately spend tens of millions a year buying the same services, while the shared vehicles meant to fix it have never really got going. In the US, credit unions working through their CUSOs make them the biggest car lender in the country. The rules that held the UK back changed in February — and whilst there's been action, the results haven't been great.
Here is the problem in one comparison.
In the US, credit unions lending through a jointly owned platform were collectively the country's number one car lender in 2025, for the fifth year running — ahead of Capital One, Ally, Toyota and Chase — funding $62bn of loans through a CUSO called Origence (Origence, 2026).
Would the US credit union sector be where it is without its CUSOs? Its own numbers say no: no individual credit union appears anywhere near that league table. The scale only exists because they built the piping together and own it.
In the UK, credit unions face rising loan demand, rising arrears, rising cost and rising member expectations around technology (Fair4All Finance, 2025) — and every one of them buys its technology, compliance, collections and broking separately, at retail prices, on its own.
That's the gap this piece is about. Why do UK CUSOs stall, and what will it take to build one that doesn't?
The rules are no longer the excuse
On 20 February 2026 the PRA published its final CUSO rules (for those regulatory nerds out there, PS5/26, 2026), and the accompanying supervisory expectations took effect a few weeks back.
Three things in the final rules matter:
A credit union can invest up to 7.5% of its capital in CUSOs.
A CUSO can be co-owned with partners that aren't credit unions, subject to safeguards.
A CUSO can serve "credit unions, their members and other mutual societies" (TC Alexander Sloan, 2026). Read that phrase again: it means a UK CUSO's addressable customers aren't just c.400 credit unions. A building society could be a customer too — and the customer bases are the real prize. The Building Societies Association's members — 42 building societies plus seven large credit unions — serve around 26 million customers between them. That, not the £500bn of assets, is the reach a UK CUSO could ultimately touch.
It's genuinely impressive — no US CUSO gets a customer definition that generous.
The most recent UK attempt
The UK's newest CUSO is Co-operative Brokerage Finance Limited, registered as a co-operative society in December 2025 (FCA Mutuals Register, 2025). Its purpose is shared services that strengthen credit unions' sustainability and growth.
As I understand it, the model is this: five credit unions each put in £25k, and the CUSO then charges them around 6% on each car loan it brokers to them. It's an interesting move, especially as most car finance brokers charge around 3% per funded loan.
At these levels the numbers don't tell a great story.
A typical £10k car loan over three years at roughly 12% APR earns a little under £2,000 of gross interest over its life, before cost of funds, credit losses and servicing.
Broker fees come straight off that: originate direct and the credit union keeps all of it; use a market broker at 3% and it keeps roughly £1,700; use the CUSO at 6% and it keeps roughly £1,400 — after first putting £25k in. So a member credit union needs to fund 19 loans, roughly £190k of lending, just to claw back its £25k stake — and every loan after that still leaves it £300 behind the market route and £600 behind originating direct:
And scale doesn't rescue it — it compounds it. By 1,000 funded loans, the 6% route has handed £600k to the CUSO in fees: £300k more than the same loans brokered on the open market, £600k more than originating direct, and nearly five times the £125k its five founders invested in the first place. That is the opportunity cost of the 6%.
Layer in funding costs and credit losses and the real break-even sits far to the right of that chart. A 6% fee clips the wings of the approach before it has begun.
But the fee isn't the deepest problem.
Look at what the product actually is. A credit union financing a car today lends unsecured: the member walks onto the forecourt as a cash buyer, outside the finance conversation where the dealer earns its margin — and with no PCP or HP on offer, the structures secured on the vehicle that give mainstream car finance its lower monthly payments.
That's worse for the member, who typically pays more for the car, and unattractive to the dealer too. Seen that way, a credit-broking permission was arguably the wrong prize. It adds a toll booth on the route to a product dealers don't want to sell.
The harder, better move — and the one a CUSO is actually for — would have been securing the permissions to write PCP and HP, making credit unions more desirable to dealers and car finance providers, not less. That is precisely the Origence contrast: CUDL doesn't send members to the dealership as cash buyers, it puts credit unions inside the dealer's finance process — funding secured loans at the point of sale, across 20,000 dealerships.
So the sector's first CUSO under the new regime is asking its owners to enter a new market, through a new vehicle, with the wrong product, at an above-market price. That's dependency risk stacked on execution risk stacked on fee drag.
The credit unions involved are solving a real problem — they're right that motor finance needs unlocking — but a first CUSO shouldn't be a leap into the unknown. It should make the things credit unions already do cheaper and better for all involved!
Does the wrapper matter?
Co-operative Brokerage Finance chose to register as a co-operative society.
It's worth asking — genuinely asking, because the new rules don't dictate a legal form — whether that's the right wrapper for a CUSO. A society wrapper carries the sector's values and one-member-one-vote governance, but three questions deserve honest answers before defaulting to it.
1. Can it raise external capital?
2. Does it slow the path to FCA permissions the CUSO itself will need, such as credit broking?
3. And can it attract operating talent, when it can't offer the equity upside a company can?
The PRA's door is open to non-credit-union co-ownership — arguably the single most important thing in the new rules — and the wrapper should be chosen to walk through that door, not to feel familiar.
The real US difference: who owns the piping
Origence's own annual report puts it plainly: credit unions get "channels they own and control" — proprietary networks, cost advantage, and control of the technology their lending runs on (Origence, 2026).
A UK credit union paying 6% to a broker is renting someone else's piping at a margin.
A US credit union paying Origence is funding piping it owns, where the fee model charges nothing per application and only on funded loans, and where every additional member lowers the unit cost for all of them.
One is a cost that compounds against you; the other is infrastructure that compounds for you. Individually, Origence's 1,100 member credit unions are small lenders. Collectively, through piping they own, they outlend Capital One.
Yet nobody in the US pretends a thousand CUSOs are a thousand successes — the NCUA's own census shows most are captive subsidiaries of a single credit union (NCUA, 2021) — and that honesty is the point.
The UK should aim to build the few, not the long tail. On a forty-year runway, a fair five-year target for the UK is one utility CUSO with forty-plus member credit unions taking at least two services each. Ireland got most of the way there in five: Metamo, a 50:50 joint venture between sixteen credit unions and Fexco, launched in 2019 with a remit spanning advisory, digital, lending technology and HR (RTÉ, 2019).
What should the UK do differently?
Judge every proposed CUSO against two objectives — and get the order right:
1. Cut the cost base of operations, to grow surplus by pooling resources. This is where a first CUSO earns its legitimacy. The savings are on existing line items the owners can see, price and govern — origination, collections, compliance — so the risk is low, the payback is measurable in year one, and every credit union added lowers the unit cost for the rest. Cost aggregation is the engine that built every large US CUSO.
2. Open new markets, so credit unions can actively compete without constraint. This is the more ambitious job, and the right sequel: a CUSO that has earned trust and scale on objective one becomes the vehicle to hold the permissions, products and partnerships that individual credit unions can't — PCP and HP in motor finance being the obvious example. Done in this order, market entry rides on proven infrastructure. Done first, as Co-operative Brokerage Finance shows, it stacks new-market risk on an untested vehicle its owners can neither see into nor price.
That sequencing is also the answer to the PRA's stated worries — unsupervised entities, single points of failure, credit unions drawn into propping up a failing CUSO. Those dangers are highest exactly when a CUSO carries risk its owners don't understand, and lowest when it does what its owners already do, cheaper.
What the UK already has
This is a glass-half-full moment, because the ingredients are unusually assembled:
Real capital headroom. Take just the 43 British credit unions whose 2024 accounts we've analysed: £119.7m of retained earnings between them. At the US-style 1% cap they could invest £1.2m in CUSOs. At 7.5%, it's £9m — enough to properly capitalise one serious operating utility:
A prize worth chasing. Those same 43 credit unions spent £42.6m on administrative expenses in 2024 alone — against £13.2m of combined surplus. A CUSO that stripped even 10% out of that cost base would add £4m a year to sector surpluses, every year, compounding. The savings case doesn't need heroic assumptions; it needs aggregation.
Anchor capital on the table. Fair4All Finance's £30m Credit Union Transformation Fund explicitly prioritises shared services and shared operational capacity (Fair4All Finance, 2026). That's a genuine gift to the sector — and it should be treated as match funding, not a crutch. A CUSO capitalised by its own members' £9m alongside transformation money is an owned utility; one that leans on grant funding alone is a programme with a shelf life. Match it, don't rely on it.
What's still missing is shorter: ambition of scope, aggregation density beyond a founding handful, and operators who have run shared infrastructure at scale. All three are choices, not conditions.
Let's get building
The excuses are gone. The regulator has said yes. The capital exists — £9m of headroom across just 43 balance sheets. The prize is quantified — £42.6m of duplicated cost, against £13.2m of surplus. The anchor funding is live and waiting to be matched. The playbook is running next door, and the cautionary tale is already on the register.
America's credit unions didn't become the country's biggest car lender by holding another conference about collaboration. Five credit unions in Detroit in 1975, and five in Florida in 1977, built companies — and then let the whole sector in.
The UK credit union sector has just been handed a better rulebook than either of them ever had — now is the time to make the most of it.