WASHINGTON–A former senior executive at NCUA and long-time voice in credit unions is blasting the agency’s sale of its taxi medallion portfolio as a “betrayal.”
The same person is calling on credit unions attending CUNA’s GAC this week to call out members of the NCUA board for why the sale was made.
Chip Filson, who co-founded Callahan & Associates and who at one point held concurrent positions at NCUA in the 1980s as president of the Central Liquidity Facility and director of the Office of Programs, which included the NCUSIF and the examination process, called the sale of the portfolio and the company to which it was sold “unconscionable.”
As CUToday.info reported here, the agency has sold the majority of its taxi-medallion loan portfolio to Marblegate Asset Management LLC., in Greenwich, Conn. As CUToday.info further reported here, all three NCUA board members—with representatives of taxi medallion owners and borrowers sitting in front of them at the monthly board meeting—have attempted to explain why the sale was made, with only Board Member Todd Harper saying he would have preferred another option.
‘No Factual Justification’
“The NCUA on Thursday at the board meeting defended an announcement they had made the night before that they were disposing of 4,500 borrowers whose loans were secured by taxi medallions to a vulture head fund—which is how the Wall Street Journal describes them,” said Filson in remarks to the Underground Collision conference sponsored by Mitchell Stankovic. “NCUA gave no factual justification for why they did it. And at board meeting you heard the board members assure the borrowers—whose signs were confiscated and the board members refused to meet with them—that this would be done with all compliance laws.”
Filson said the 4,500 borrowers were “sold out to the very institution we were set up to compete against. (Marblegate) has been trying to monopolize the ownership of medallions in New York City, and this will give them about a third of the medallions. This is a power play. We have taken the powerless and sold them off for $350 million to a fund that has $16 billion.”
Filson called the sale “unconscionable” and a “stain” on the cooperative system.
‘31 Cents on the Dollar’
Filson said he believes credit unions could have set aside $350 million to buy the portfolio with a purpose of assisting with loan workouts for medallion loan-holders struggling with payments on collateral that once sold for seven figures but that today sell for less than a fifth of that.
“They were sold for 31 cents on the dollar to a hedge fund,” said Filson.
Filson called on attendees at CUNA’s GAC to ask hard questions about the sale when the three members of the NCUA board are on hand for their own remarks and meetings.
“You have to challenge them on this issue,” said Filson. “They have corrupted the whole concept of what we stand for. Is this building the trust for the system? How would you like to know your individual loan was sold to a hedge fund and be told that hedge fund will take care of you? No, they won’t. They are interested in getting control of that medallion.”