WASHINGTON — Federal regulators yesterday seized two large companies that provide critical banking services to the credit union industry after finding that the companies had sustained debilitating losses, threatening the health of thousands of credit unions.

The seizure of U.S. Central Corporate Federal Credit Union and Western Corporate Federal Credit Union marked a dramatic expansion of the government's efforts to stabilize a corner of the financial industry long viewed as a safe haven because of its generally conservative practices.

The National Credit Union Administration said it would replace the management of both institutions and that their operations would otherwise be unaffected. The NCUA said its action was intended to shelter customers of retail credit unions from any consequences.

"Credit unions that serve consumers remain very strong" and deposits remain safe, the NCUA said in a statement.

U.S. Central, which has $34 billion in assets, functions as the central bank of the credit union system.

Most of the nation's 8,400 credit unions — cooperatives that lend to their members at low interest rates — serve small communities such as the employees of a particular company. These small institutions generally invest some of their assets with larger institutions called corporate credit unions to take advantage of financial markets they are not big enough to tap individually. Those corporate credit unions in turn invest some of their assets with U.S. Central. The system also allows the members to borrow from each other.

Western Corporate, which is a member of the second tier of credit unions, and U.S. Central both invested some of that money in mortgage-backed securities, as did other corporate credit unions. In all, the 27 corporate credit unions invested about $64 billion. The results are by now familiar: The securities have plunged in value, tying up cash because they can only be sold at a large loss. That has limited the ability of the smaller credit unions to withdraw money from the corporates, threatening their health in turn.

NCUA already has intervened twice. In December, the agency announced a plan to pump up to $15 billion in loans into the corporate credit unions to improve their health. In January, NCUA invested $1 billion directly in U.S. Central and guaranteed all the money invested at the 27 corporate credit unions to forestall withdrawals.

The federal aid comes from assessments on the industry, not from taxpayers.

After both previous interventions, regulators emphasized that the problems were under control. But the NCUA said yesterday that the losses at U.S. Central and Western Corporate had continued to grow, and that the credit unions that make up their membership had lost confidence in their stability, forcing the government to intervene.

The two institutions yesterday were placed under conservatorship, a legal status that gives the government complete control.

The NCUA said it believed the remaining corporate credit unions would not require a similar intervention.

The struggles of the corporate credit unions have tied up a great deal of money at a time when credit unions are facing unprecedented demand for loans. Credit unions made a record volume of loans in 2008 as some customers turned away from banks.

The cost of the NCUA rescue, which remains to be determined, will impose a further limitation, as it must be repaid by the industry.