Credit Union Service Organisation
Shared secured lending infrastructure for the credit union movement.
Second-charge mortgage capability, built once and centrally, then shared across the credit unions that own it. The loans stay on credit union balance sheets. The member stays in the movement.
One platform. Many credit unions. One product, done well.
The problem
The gap sits above every credit union's unsecured limit.
Around £25,000 is where practical unsecured credit union capacity ends. Above that line, the member's options turn commercial and the movement loses them.
UK adults held a second-charge mortgage in May 2024, close to three times the 2017 rate.
of mortgage holders also hold a personal loan, against 14% of all adults. That is the cohort this product serves.
adults hold a residential mortgage, and 17% carry debt at four times income or more.
of new second-charge lending advanced in 2025, up 24% by value on the year before.
Sources: FCA Financial Lives 2024; FCA second-charge mortgage multi-firm review, March 2026; Finance and Leasing Association full-year data, 2025.
Unsecured loans up to £25,000.
Credit unions do this well, at fair rates, for members other lenders will not serve.
Loans over £25,000 secured by a second-charge mortgage.
No shared sector infrastructure for secured lending exists. Every over-sized or declined loan is a member who leaves the movement.
“We have been awarded a penalty, with no goalkeeper in the net.”
Why now
Four things have aligned, and the window is dated.
The secured lending opportunity is undefended. It will not stay that way. What the movement does in the next two years decides whether credit unions or commercial brokers take it.
The problem has been named.
The FCA's March 2026 second-charge review criticised the broker-led market: weak affordability assessment, steering toward consolidation, unclear fees. The case for a member-first alternative is now regulator-made.
PS5/26 gives CUSOs a formal footing.
For the first time there are rules built for shared credit union infrastructure. In force from 20 February 2026, with supervisory expectations from 20 August 2026. The structural uncertainty is gone.
The sector has committed to shared infrastructure.
The national credit union transformation programme, backed by £30m of dormant assets funding, explicitly commits to incubating Credit Union Service Organisations so essential functions can be built once and shared.
Second-charge lending is growing fast.
2025 was the strongest year for new second-charge lending since 2008. The market is expanding while the movement's capability gap stays open, and first movers set the standard the rest of the network runs on.
The approach
Build the capability once, centrally. Share it across the movement.
The Credit Union Service Organisation is not a new idea. It carries a forty-year track record abroad. What matters is the discipline of the thing built: narrow scope, real ownership, and no disruption to what already works.
A model the US and Irish movements run on.
Credit Union Service Organisations deliver shared infrastructure that no single credit union could viably build alone.
Nothing a credit union already runs has to change.
The platform sits beside each credit union's existing systems and leaves them untouched. No core system migration, no shared ledger, no loss of control over credit decisions.
One product, done well.
Second-charge mortgages only, for as long as it takes to do that one thing properly. Earlier sector programmes failed by being too broad and imposed from the top. That lesson is designed in.
Structure
Three roles, each where the rules require it.
The two-entity architecture follows a written supervisory steer. Each function sits with the entity permitted to carry it.
The unregulated CUSO.
Platform, standards, product design, declined-case routing and governance. Co-owned by its founding credit unions. Deliberately never advises and never lends.
Separately FCA-authorised.
Regulated advice and arranging sits with a separately authorised firm, already authorised and operating today, so there is no authorisation wait on the advice side.
Credit unions.
Loans sit on each credit union's own balance sheet, within its own appetite, under its own varied lending permission. Lending permission precedent already exists in the movement.
The product
Designed against the regulator's findings, not despite them.
The FCA's March 2026 second-charge review identified weak affordability assessment, inappropriate steering toward consolidation, and unclear fees. Each of those findings has a design answer here.
One flat fee.
A single flat fee, the same whatever the size of the loan, assessed for fair value under Consumer Duty. Not a percentage of the advance, so the cost to the member does not climb as the loan does.
£25,000 to £75,000.
Sensible, cautious loan-to-value limits. The member keeps meaningful equity in their home rather than having it stripped out.
No commission incentive.
Advisers are paid no completion-linked commission. The member is advised on suitability, through an authorised firm, to a single network standard.
A decline is not an exit.
A case declined by one credit union rotates to others in the network, with no placement fee. The member stays in the movement.
The commitment
This is how the movement doubles membership and trebles lending.
That is the stated ambition of the national credit union transformation programme. It will not be reached on unsecured lending alone. Secured lending is the largest single capability gap standing between the movement and its own target.
A new asset class for the sector.
Secured lending diversifies credit union balance sheets, lengthens the loan book and deepens the member relationship. It is the capability the movement most conspicuously lacks.
Members join for products.
A fair secured product attracts homeowner members the movement does not currently reach. Loan-led growth widens the common bond from both ends rather than competing for the same members.
Fair finance for the green transition.
Retrofit lending for owner-occupiers in fuel poverty, delivered through credit unions. Nobody else in the movement can do this, because it requires secured lending capability that does not yet exist.
Ownership and governance
Owned by the sector, governed in the open.
The conflicts in a structure like this are real. They are disclosed and structured rather than left to trust.
Founding credit unions hold the equity.
Founding partners co-own Mutuality Ltd and collectively hold the voting majority at launch, with board seats, one share class and pre-emption rights.
The things that cannot change quietly.
The member fee, product scope, declined-case placement and the cap table cannot change without founding-partner consent.
Managed by design, not by assurance.
The authorised advice firm is structurally aligned to the founding partners rather than to its own volume: margins capped at cost-plus on an open-book basis, with surplus routed to the entity the credit unions own. The firm succeeds when credit union lending grows, not when it earns more per case. Independent structural legal review has been instructed with sector counsel.
Where we are
The road to first lending.
Gated by lending permissions and the platform build, not by any new authorisation.
Founding cohort forming. Independent structural legal opinion instructed. Corporate documentation in preparation.
First credit union lending-permission variations lodged. Platform build. Compliance framework.
Operational launch. First cases advised through the authorised firm, pilot then scale.
Second-wave onboarding. Green retrofit product line. A participation model to bring smaller credit unions in.
Contact
If you run a credit union, we should talk.
The full monthly cost and cash-flow model, with every assumption exposed, is shared with credit union boards under due diligence. Ask for it directly.
paul@mutuality.org.ukPaul Hancock
Founder and Chief Executive, Mutuality Ltd.
Around forty years in financial services, spanning specialist mortgage-backed lending and credit union governance, including senior approved-person roles within the movement.