NEW YORK–Delinquencies and troubled debt increased 25% over the two-month period ended July 31 at Melrose Credit Union, which primarily makes loans for New York taxi medallions.
As CUToday.info has reported previously, the value of tax medallions has steadily declined as the prevalence of “ride-sharing” services such as Uber and Lyft has grown.
According to Crain’s New York Business, delinquent and troubled debt at Melrose is now approximately $400 million, which is nearly equal to the capital of the $2.1-billion Melrose CU.
Melrose CU’s June 30 5300 reports approximately $206-million in reportable delinquencies, the bulk of which is 60-179 days delinquent. Over that same time period, values on taxi medallions in New York have been consistently sinking as more consumers use Uber and Lyft. Melrose also reported $158 million in troubled debt restructured loans. More than three-quarters of Melrose CU’s loan portfolio is made up of taxi medallion loans.
MCU reported $371,420 in net income through the second quarter.
Crain’s New York Business reported that Melrose Credit Union stated in a letter to the city’s chief lawyer late last month that 471 of its taxi loans will mature in the next six months, and if borrowers can’t make $212 million in balloon payments, the credit union may have to foreclose and sell the medallions for whatever it can.
Melrose is one of four credit unions—along with Lomto CU, Progressive CU and Montauk CU, that have filed suit against New York City, claiming that companies such as Uber and Lyft violate city law and constitute “illegal hails.”