BRONX, N.Y.—Even after the closing of all four New York City taxi medallion CUs, ride sharing services continue to have a negative impact on credit union loan portfolios.
A new report indicates the latest casualty is Van Cortlandt Cooperative Federal Credit Union here, which had taxi medallion participation loans in its portfolio. NCUA in the first quarter of 2019 approved the merger of Van Cortlandt Cooperative FCU into USAlliance Federal Credit Union, Rye, N.Y.
“While the official reason cited for the merger is expanded services, the credit union was being negatively impacted by participation loans financing taxi medallions,” stated Keith Leggett, the former senior vice president and senior economist at the ABA.
Since the beginning of 2018, the credit union charged off almost $6.5 million in commercial loan participations not secured by real estate, Leggett said, adding the CU recorded losses of $91,630 for 2018 and $69,709 for the first quarter of 2019.
As CUToday.info reported, medallion lender Progressive CU—which posted nearly a $103-million loss for 2018—was quickly merged into PenFed at the start of the year. NCUA approved the emergency merger, which became effective Jan. 1.
Previously, Montauk CU, Melrose CU and LOMTO FCU all failed due to the impact on their portfolios from Uber and Lyft.