U.S. regulators seized control on Friday of U.S. Central Federal Credit Union, a huge wholesale credit union with $34 billion in assets that provides services to nearly every other credit union.
The National Credit Union Administration (NCUA) also took control of Western Corporate (WesCorp) Federal Credit Union with $23 billion in assets.
The regulator said both institutions had an unacceptably high concentration of risk.
Also on Friday, bank regulators seized three small banks with a total of 1.1 billion of assets.
The NCUA said service will continue uninterrupted at U.S. Central and WesCorp, and said member accounts are guaranteed through December 31, 2010.
Corporate credit unions are the retail credit union's credit union, providing services including lending, and check and payment clearance services.
NCUA said it seized the credit unions after completing a detailed analysis and stress test of the mortgage and asset backed securities held by all corporate credit unions.
U.S. Central based in Lenexa, Kansas has 26 corporate credit union members and says it provides settlement services to 100 percent of corporate credit unions and 93 percent of all U.S. credit unions.
WesCorp based in San Dimas, California, has approximately 1,100 retail credit union members, the NCUA said.
Regarding the three small banks, the U.S. Federal Deposit Insurance Corp found other banks to acquire the deposits of TeamBank
(Reporting by Karey Wutkowski, Helen Chernikoff and Elinor Complay; Editing by Tim Dobbyn)