Washington ? Federal regulators on Friday seized control of two large institutions that provide wholesale financing for U.S. credit unions, a move they say was needed to stabilize the credit union system.

The National Credit Union Administration said it has taken over and put into conservatorship the two corporate credit unions, U.S. Central Federal Credit Union, based in Lenexa, Kan., and Western Corporate Federal Credit Union, in San Dimas, Calif.

A conservatorship enables the government to operate a financial institution. Corporate credit unions provide financing and investment services to retail credit unions. Some of the 28 corporate credit unions in the U.S. have sustained steep losses on paper from the depressed value of the mortgage-linked securities they hold.

The financial services provided by the two corporate credit unions “will continue uninterrupted” and there will be no direct impact on the 90 million members of retail credit unions nationwide, the NCUA said in a news release.

It said retail credit unions, which are cooperatives owned by their members, remain financially strong — with net worth exceeding 10 percent of assets, and sustained growth in assets and membership despite the deep recession.

In January, the NCUA injected $1 billion of capital into U.S. Central, an institution with about $34 billion in assets. At the same time, the agency moved to guarantee tens of billions of dollars in uninsured deposits at corporate credit unions overall, the latest in a series of actions to shore them up in the face of financial stress.

Western Corporate Federal Credit Union, known as WesCorp, has an estimated $23 billion in assets.

The NCUA has proposed restructuring the corporate credit union system with an eye to enhancing its stability.

Banks go under

Meanwhile, regulators on Friday shut down banks in Georgia, Colorado and Kansas, marking 20 failures of federally insured banks this year. More are expected to succumb to the prolonged recession.

The Federal Deposit Insurance Corp. was appointed receiver of the failed banks.

FirstCity Bank of Stockbridge, Ga., had about $297 million in assets and $278 million in deposits as of March 18. Colorado National Bank of Colorado Springs, Colo., had $123.5 million in assets and total deposits of $82.7 million as of Dec. 31. Paola, Kan.-based Teambank N.A. had assets of $669.8 million and total deposits of $492.8 million as of Dec. 31.

The FDIC said it will mail checks to depositors of FirstCity Bank for their insured funds on Monday morning. Direct deposits from the federal government, such as Social Security and veterans’ benefits payments, will be transferred to SunTrust Bank.

At the time of closing, FirstCity Bank had an estimated $778,000 in deposits that exceeded the insurance limits, the FDIC said. Regular deposit accounts are insured up to $250,000.

Amarillo, Texas-based Herring Bank will assume all of the deposits of Colorado National, whose four branches will reopen as Herring Bank branches today.

Teambank’s 17 branches will reopen today as branches of Great Southern Bank. The Springfield, Mo.-based bank is assuming $474 million of Teambank’s deposits for about $4.7 million, while the FDIC is paying out $18.8 million in deposits directly to brokers.

Great Southern Bank has also agreed to buy about $656.5 million in assets at a discount of $100 million. The remaining assets will be sold at a later date, the FDIC said. Additionally, the FDIC has agreed to cover 80 percent of the losses on about $450 million in assets, while Great Southern Bank will cover the remaining 20 percent of losses.

The FDIC estimates that the cost to the deposit insurance fund from the closings of the three banks will be about $207 million.