NEW YORK—One analyst who has been following the taxi medallion loan problem closely is reporting that three New York CUs continue to have issues in their portfolios, largely due to participations in taxi medallion loans.
As CUToday.info has extensively reported, ride sharing services, such as Uber and Lyft, have led to plummeting values in taxi medallions across the country, hitting New York City the hardest. But the issue isn’t just limited to credit unions in the New York metro area.
Keith Leggett, the former senior vice president and senior economist at the American Bankers Association, has stated that the taxi medallion participations could total $3 billion across the nation.
Quorum Federal Credit Union (Purchase, N.Y.)
Quorum Federal Credit Union participated in taxi medallion lending, although the program was ended in 2013, noted Leggett on his Credit Union Watch blog.
“The credit union is reporting that $31.1 million in participation loans were 60 days or more past due as of March 2017. Presumably these delinquent participation loans are primarily taxi medallion loans. This is up from $21.5 million at the end of 2016,” said Leggett. “The delinquency rate on participation loans were 27.36% as of March 2017, up from 18.78%.”
In addition, Quorum reported $24.4 million in outstanding troubled debt restructured business loans at the end of the first quarter of 2017. This is down slightly from $25.1 million at the end of 2016, noted Leggett.
After posting a loss of $6.7 million for 2016, the credit union reported a profit of almost $1.9 million. Provisions for loan losses were $1.8 million for the first quarter of 2016, down from $6.8 million one year ago, Leggett said.
Among the credit unions showing exposure to the loans:
Bay Ridge Federal Credit Union (Brooklyn, N.Y.)
“Bay Ridge Federal Credit Union appears to have exposure to taxi medallion loans,” said Leggett. “The credit union is reporting $80.8 million in non-real estate member business loans at the end of the first quarter of 2017. One would expect some of these business loans are taxi medallion loans.”
Delinquent non-real estate business loans grew from 737,501 as of the first quarter of 2016 to almost $4.8 million as on March 2017. The percentage of non-real estate member business loans that are 60 days or more past due rose from 0.88% to 5.91% over the same period, noted Leggett.
In addition, troubled debt restructured business loans, which are not secured by real estate, were $22.6 million as of the first quarter of 2017 – up from $23.1 million at the end of 2016 and from $14.4 million one year earlier, explained Leggett.
The credit union is well capitalized with a net worth ratio of 9.34%. It reported a small profit of $19,195 for the first quarter of 2017 – down from a profit of 532,372 from one year ago, said Leggett.
G.P.O. Federal Credit Union (New Hartford, N.Y.)
“According to GPO Federal Credit Union's Call Report, the credit union reported almost $15.1 million in non-member business participation loans at the end of the first quarter of 2017. Total participation loans were $16.3 million,” said Leggett. “I suspect most of these non-member participation loans were taxi medallion loans.”
The credit union reported that $5.4 million in participation loans were delinquent. “This means that almost one-third of all participation loans were past due 60 days or more,” Leggett said.
In comparison, 3.98% of all loans were delinquent.
In addition, the credit union is reporting that $1.9 million in outstanding troubled debt restructured business loans, noted Leggett.