WOODSIDE, N.Y.—NCUA Monday placed $237-million LOMTO FCU here into conservatorship.
LOMTO is the third taxi-medallion CU the agency has taken action against as the value of medallions in New York City, which are required in order to legally drive a cab, have plummeted to approximately half of their peak values. That has led many members to default on their medallion loans.
Such defaults led to the conservatorship of the $1.8-billion Melrose Credit Union earlier this year and, prior to that in September of 2015, the conservatorship of another taxi medallion lender, Montauk CU. It was later merged into Bethpage FCU.
NCUA placed LOMTO into conservatorship because of unsafe and unsound practices at the credit union, the agency said, adding that it will work to resolve issues affecting the institution’s safety and soundness while maintaining normal member services.
LOMTO is the third CU to be conserved by the agency in the last three business days. Thursday the Alabama Credit Union Administration and NCUA together conserved $76-million Riverdale CU in Selma, Ala.
Friday NCUA took control of Citizens Community Credit Union in Devils Lake, N.D.