Bad Taxi Medallion Loans and New York Credit Union Merger

Credit Union Times is reporting that potential losses from taxi medallion loans played a role in the merger of Northwell Health Federal Credit Union (Jericho, NY) with Bethpage Federal Credit Union (Bethpage, NY).

The Northwell Health Federal Credit Union reported a loss of $2.1 million for 2016, as the credit union increased loan loss provisions for anticipated losses associated with taxi medallion participation loans.

At the end of the first quarter of 2017, Northwell Health had approximately $10.6 million in business participation loans, presumably most of the loans, if not all, were taxi medallion loans. Almost one-third (32.5 percent) of participation loans were 60 days or more past due.

Last year, Bethpage acquired troubled taxi medallion lender Montauk Credit Union.

I suspect that this latest merger will not be the last credit union merger due to taxi medallion loan losses.

Read the Credit Union Times article.