The federal government Wednesday broadened its bailout to include the credit union industry, one day after National Credit Union Administration chairman Michael E. Fryzel called upon new Treasury Secretary Timothy Geithner to “expand options” for credit union participation in the Troubled Asset Relief Program. “Although I can understand the initial actions that the Treasury Department has taken to help the large banks, insurance companies, and other major financial institutions that have faltered or failed, I am concerned about the second-place status into which credit unions and other smaller financial institutions have been placed,” Fryzel wrote in a letter to Geithner. The request of Fryzel and many others was answered Wednesday. One billion is now set to be infused into U.S. Central Corporate Federal Credit Union, which provides services to consumer-facing credit unions, to offset losses on mortgage-backed securities. “We figured this day might come, with the overall market conditions the way they are, but we were attempting to allow U.S. Central to work though it,”Fryzel said, according to the Washington Post. “Now we’ve done what we felt we needed to stabilize the system and to put confidence back in the system.” Soured investments in highlyrated mortgage-relates securities has lead to the depletion of U.S. Central’s funds, which has put many of the nation’s 8,400 credit unions at risk. The credit union told the NCUA Monday it estimated a $1.2 billion fourth-quarter loss. It was at that point the NCUA, which regulates the industry, met and then announced the intervention, which will be funded by assessments upon the industry rather than taxpayers. Beyond the issuance of a $1 billion capital note to U.S. Central, the NCUA Board also approved the guarantee of uninsured shares at all corporate credit unions through February 2009, and the establishment of a voluntary guarantee program for uninsured shares of all corporate credit unions through 2010. The move by the NCUA marks the government’s second attempt to help stabilize corporate credit unions. In December, NCUA said it would lend billions through retail credit unions. The agency has thus far loaned $5 billion under the program, and said it expects to give another $5 billion at the end of the month. Write to Kelly Curran at kelly.curran@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.