ALEXANDRIA, Va.—Another taxi-medallion CU has been liquidated.
In a rare non-Friday liquidation, the New Jersey Department of Banking and Insurance liquidated $86-million First Jersey Credit Union. The $1.4-billion USALLIANCE Federal Credit Union of Rye, N.Y., immediately assumed most of First Jersey’s assets and loans and all member shares, reported NCUA, which was appointed the liquidating agent.
The New Jersey Department of Banking and Insurance made the decision to liquidate First Jersey and discontinue its operations after determining the credit union was insolvent with no prospect for restoring viable operations on its own.
Due to the impact of ride-sharing services on medallion values in New York City and surrounding areas, First Jersey is the fourth taxi medallion CU to either be conserved or liquidated. In addition to NCUA in 2017 placing LOMTO FCU and Melrose CU into conservatorship, in September of 2015, taxi medallion lender Montauk CU was conserved and then later merged into Bethpage FCU.
As CUToday.info reported in early February, problem loans, many of them secured by taxi medallions, had wiped out the net worth of First Jersey CU. The credit union had slightly less than $10.4 million in commercial loans not secured by real estate.
First Jersey reported a fourth quarter loss of $3.1 million and a 2017 loss of $8.9 million. As a result of the loss, the credit union reported net worth of zero at the end of 2017, down from $8 million at the end of 2016, according to the CU’s call report.