At the Credit Union National Association's Government Affairs Conference, National Credit Union Administration (NCUA) Board Member McWatters on February 24 defended the agency's decision to sell its portfolio of taxi medallion loans.
McWatters was responding to criticism the agency should have waited for a possible initiative from the New York Taxi Workers Alliance to form a public/private partnership to purchase the agency’s medallion loan portfolio.
However, McWatters stated that postponing the sale would have been inappropriate.
McWatters claims that if the agency postponed the sale, it would have lost the winning, least cost bidder.
The winning bidder, Marblegate Asset Management, was ready, willing, and able to close on the transaction, according to McWatters.
Postponing the sale would have most likely resulted in additional material losses for the National Credit Union Share Insurance Fund (NCUSIF), which would cause NCUA to "forgo distributions to credit unions for the intermediate future, if not longer."
McWatters told the crowd that NCUA "retained the services of outside consultants and investment advisors who assisted us in developing a plan to sell the taxi medallion loan portfolio pursuant to an open and transparent auction process."
In addition, McWatters addressed the topics of credit unions acquiring community banks and credit unions maintaining adequate capital and liquidity levels.
Read the speech.
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