Feds Bail Out Credit Union Network With $80B Guarantee

US injects $1 billion into nonprofit company that provides services to credit unions
By Jim O'Neill,  Newser User
Posted Jan 29, 2009 8:33 AM CST
Federal regulators on Wednesday guaranteed $80 billion in uninsured deposits at the powerful institutions that service the nation's credit unions.   (©ginza_line)
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(Newser) – Federal regulators yesterday expanded their bailout of the financial sector, injecting $1 billion into one of several nonprofit companies that services credit unions nationwide and offering a guarantee of up to $80 billion for uninsured deposits at the “wholesale” credit unions, reports the Wall Street Journal. Regulators acted after US Central Federal Credit Union posted a $1.1 billion loss yesterday.

US Central, hammered by investments in mortgage-related securities, is one of 28 wholesale credit unions servicing the 8,400 credit unions nationwide. With money running short, the National Credit Union Administration, the industry's federal regulator, said it acted to shore up confidence.