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US Seizes Control of 2 Largest Corporate Credit Unions

Federal regulators have taken over two large institutions that provide wholesale financing for U.S. credit unions, a move they say was needed to stabilize the credit union system.

The National Credit Union Administration said Friday it has taken over and put into conservatorship the two corporate credit unions, U.S. Central Federal Credit Union, based in Lenexa, Kan., and WesternCorporate Federal Credit Union, in San Dimas, Calif.

A conservatorship enables the government to operate a financial institution. Corporate credit unions provide financing and investment services to retail credit unions. Some of the 28 corporate credit unions in the U.S. have sustained steep losses on paper from the depressed value of the mortgage-linked securities they hold.