Wholesale Credit Unions Seized

Two very large wholesale credit unions were taken over by the government, extending the scope and expense of the bailing out of the US financial system. It is another example of the number of “unanticipated” costs of keeping the credit markets from seizing up entirely.

According to MarketWatch, National Credit Union Administration said Lenexa, Kan.-based U.S. Central Federal Credit Union and San Dimas, Calif.-based Western Corporate were placed into conservatorship “to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund.”

The NCUA will almost certainly need money from the Treasury to cover supporting these institutions and others the are likely to need assistance.

Taxpayers get to foot another bill.

Douglas A. McIntyre