The carnage among taxi medallion lending credit unions continues.
The latest news is the announced merger of Bay Ridge Federal Credit Union (Brooklyn, NY) into Island Federal Credit Union (Hauppauge, NY) on October 1.
According to the press release, the National Credit Union Administration (NCUA) recently approved the merger.
Problem taxi medallion loans sunk Bay Ridge FCU. The $183 million credit union was undercapitalized, as of June 2018. (Click here to read my commentary on Bay Ridge's second quarter 2018 performance).
Bay Ridge FCU had an exception from the aggregate member business loan cap of 12.25 percent of assets, because it had either a history of or chartered for the purpose of making business loans.
The New York City taxi industry has been disrupted by ride sharing companies. As a result, the price of taxi medallions plummeted from 2014 highs in excess of $1 million to as low as $160,000.
On August 31, NCUA liquidated the largest taxi medallion lending credit union, Melrose Credit Union (Briarwood, NY).
Read the press release.
How does the math work on these deals?
ReplyDeleteWhere’s the disclosure?
Is the buying credit union absorbing all the taxi loans?
The buyers don’t appear to have the capital to do so.