Five of the largest credit unions in the United States have reported steep paper losses on mortgage-related securities.

This suggests that the housing-market crunch is spreading to the most conservatively run financial sector, the Wall Street Journal reports.

Credit unions are member-owned, not-for-profit cooperatives that accept deposits and lend money like banks.

The problem centers on "corporate" credit unions, major players in the sector. These don't deal directly with customers, but provide investment services and financing to retail credit unions that deal directly with members.

The 5 corporate credit unions reporting large mortgage-related losses are: U.S. Central Federal Credit Union; Western Corporate Federal Credit Union; Members United Corporate Federal Credit Union; Southwest Corporate Federal Credit Union; and Constitution Corporate Federal Credit Union.

Together, the corporate credit unions reported about $5.7 billion in "unrealized" losses at the end of May. Unrealized loses occur when the market value of a security falls, even if it hasn't been sold.

The National Credit Union Administration, the federal regulator overseeing credit unions, says the losses are likely to be reversed when the mortgage market stabilizes, and that the credit unions are sound and adequately capitalized.