Credit Union Collapse Signals Depth of Financial Crisis

Geithner's Toxic Asset Plan Not Specifically Designed for Credit Unions

By Mary Kane 3/26/09 3:09 PM

In a sign of how widespread the nation’s financial crisis has become, even the credit unions are getting creamed.

Problems in the credit union system, once considered a largely mom-and-pop operation immune to turmoil, came to light last week, when their regulator seized two of the nation’s largest credit unions, U.S. Central Credit Union in Lenexa, Kanss, and Western Corp. Federal Credit Union in San Dimas, Calif. The two, with combined assets of $57 billion, are in trouble over the same investments in toxic mortgage backed securities that have felled global banks and led to the credit crunch.