The move underscores mounting strain on the smallest federally insured lenders, as losses and declining membership prompt stepped-up regulatory intervention.

For the second time in less than a week, the National Credit Union Administration has moved to conserve a small federally insured credit union, a sign of growing stress among the industry’s smallest institutions.

On Thursday, the agency placed Beverly Hills City Employees Federal Credit Union, a lender serving municipal workers in Beverly Hills, Calif., into conservatorship, citing unsafe and unsound practices. The action allows the credit union to remain open while the regulator works to resolve operational issues.

Beverly Hills City Employees Federal Credit Union reported losses of $218,000 through Sept. 30, 2025, following a loss of nearly $137,000 in 2024, according to its most recent regulatory filings. The institution has 1,542 members and reported assets of $16.5 million, making it part of a shrinking tier of small credit unions struggling to remain viable.

During conservatorship, member services continue uninterrupted. Accounts remain federally insured, and members may conduct normal transactions while the agency oversees the credit union’s operations.

The action comes amid a broader contraction among federally insured credit unions with assets between $10 million and $50 million. The number of institutions in that category fell to 1,158 in the third quarter of 2025, down from 1,227 a year earlier, according to industry data. Together, those credit unions held $30.8 billion in assets — about 1% of the total credit union system.

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Operational pressures have mounted across that segment. Over the past year, loans at these institutions declined 7.4%, while membership fell 7.1%. Net worth rose modestly, by 0.6%, suggesting that capital levels have stabilized even as growth has stalled.

The Beverly Hills action follows a similar move on Jan. 16, when the NCUA placed People Trust Community Federal Credit Union in North Little Rock, Ark., into conservatorship, also citing unsafe and unsound practices. That institution had fewer than 2,000 members and assets of just over $3 million.

In November, the regulator conserved Copper & Glass Federal Credit Union in Glassport, Pa., a lender with roughly 1,255 members and $7.1 million in assets. Copper & Glass was one of three credit unions conserved by the agency in 2025. The NCUA also closed five credit unions last year, reflecting what regulators have described as increasing fragility among the smallest institutions.

For decades, credit unions have relied on close ties to narrowly defined fields of membership — such as municipal workers or employees of a single company — to sustain their operations. But rising compliance costs, technology demands and competition from larger financial institutions have made that model increasingly challenging.

Conservatorship, while disruptive, is intended to stabilize troubled credit unions without immediately forcing liquidation or merger. Whether Beverly Hills City Employees Federal Credit Union can emerge intact will depend on the regulator’s ability to address its operational shortcomings — and on whether the broader pressures facing small credit unions continue to intensify.