Credit unions have long held themselves out to be upright, arch-conservative lenders-- throwbacks to a much simpler, safer era in consumer banking. Normal Rockwell would have found credit union executives worthy subjects. But the financial crises has revealed the unsavory side of thrifts.

According to the New York Times, three wholesale credit unions--Members United Corporate Federal Credit Union of Warrenville, Ill., Southwest Corporate Federal Credit Union of Plano, Tex., and Constitution Corporate Credit Union of Wallingford, Conn.--were seized by National Credit Union Administration, the FDIC of thrifts.

That makes 5 of 27 wholesalers who have been taken over by regulators, who pretty much had to act to prevent the possibility of a run by retail institutions. The portfolio of these entities are familiarly toxic: sub-prime mortgage-backed bonds and other securities.

What's needed, however, is a more comprehensive plan for the ailing thrift industry. No taxpayer money was spent as part of the seizures, as the NCUA has a fee-support insurance fund. But members will likely face higher fees in the future. The bubble has burst.

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