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.
(Read more bailout stories.)