“Regulators seized the top clearinghouse for U.S. credit unions, citing a critical deterioration in the finances of the provider of services to thousands of retail credit unions.

The National Credit Union Administration (NCUA) took control of U.S. Central Federal Credit Union, a huge wholesale credit union with about $34 billion in assets based in Lenexa, Kansas.

It also seized Western Corporate (WesCorp) Federal Credit Union of San Dimas, California, another corporate credit union with $23 billion in assets.

Stress tests of corporate credit unions had uncovered an “unacceptably high concentration of risk” at these two institutions, the regulator said in a statement.

The immediate costs of the takeover are coming out of a $7 billion industry-maintained insurance fund, but will mean higher premiums levied on retail credit unions.

The action highlighted strains in the nonprofit banking sector that has recently been touted as a source of new lending, even as many for-profit banks limit their lending and receive billions of dollars of taxpayer-funded capital injections.

U.S. regulators also seized another three small banks on Friday, bringing the total to 20 so far this year….”

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