National Credit Union Administration (NCUA) Board Chairman Rodney Hood on September 25 provided more insights into the agency's process in selling off its tax medallion portfolio it assumed from failed credit unions.
Addressing the Credit Union National Association Government Affairs Conference, Chairman Hood commented that NCUA evaluated a number of options, but came to the determination that a singular bulk sale would be in the best interest to the National Credit Union Share Insurance Fund.
Hood told the audience that NCUA received bids for a portion of the medallion portfolio from interested bidders, but concluded that the sum of the subset bids were less than the bids for the overall portfolio.
He noted that NCUA in consultation with its financial advisors reached out to 23 firms with experience in handling distressed commercial assets. Six of these firms submitted bids. NCUA allowed two firms go through to the final due diligence bid round and received two independent offers. The agency turned away some firms because it lacked confidence that the firms would treat borrowers in a fair way.
Hood cautioned credit unions that "[h]olding these medallion assets beyond a reasonable period" could result in the agency repeating past mistakes. The past mistake is referencing the properties in Florida that were assumed by NCUA with the failure of Norlarco and Huron River Area Credit Unions.
Read the speech.
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