By Frank J. Diekmann
As CUToday.info reported earlier, NCUA appears to have dodged a bad taxi ride just in the nick of time. And it appears to have been luck more than anything else.
NCUA’s decision to sell off its portfolio of some 3,500 taxi medallion loans was controversial at the time, with many arguing it had moved to quickly in what was to many, frankly, a surprise announcement.
In February the agency sold the portfolio of loans it had acquired as the result of the conservatorship of failed taxi-medallion CUs in New York for approximately $350 million to Connecticut-based Marblegate Asset Management.
At the time of the sale taxi medallions were selling for approximately one-fifth of their all-time high and the National Credit Union Share Insurance Fund (which means credit unions) had already taken an approximately $750-million bath as a result of the conservatorships.
The sale led to NCUA board members going to some length to explain the reasoning behind the sale, as many had been calling on the agency to hold off until some sort of public/private partnership might be developed to help struggling taxi medallion owners.
At the time, the three NCUA board members said they have extracted a pledge from Marblegate Asset Management to work with borrowers.
Now, Marblegate likely has no choice.
The days of cab drivers blowing past an arm-raised pedestrian because the driver has had enough business for the day are long over. The New York Times recently reported on drivers waiting as long as six hours to get ONE fare at Kennedy airport. That’s not far removed from waiting for John F. himself to arrive. With New York City under strict shelter-at-home rules, taxi owners and drivers who were barely holding on told the Times their livelihood had evaporated, and data show rides are down 91%.
The New York Taxi Workers Alliance’s executive director, Bhairavi Desai, said his group has received calls from dozens of taxi drivers who can no longer afford to pay for necessities like groceries and medicine.
And that means they aren’t paying down loans on taxi medallions.
Just imagine the pressure NCUA would be under right now for some sort of deal on payment forbearances if it were still holding the portfolio.
New Meaning
A recent press release on efforts in the Garden State to protect people during the pandemic made reference to “New Jersey financial protection.” My, how those four words have taken on new meaning.
Something You May Not Have Thought About
During a recent presentation, Mike Higgins of the consulting firm that bears his name offered a unique suggestion related to something few credit unions have likely given any thought to. Higgins urged CUs to appoint a historian.
“Credit unions have long put their members’ financial well-being first. But they don’t always tell their story as well as they could,” Higgins said. “I recommend appointing a historian for your pandemic response, someone to document the decision points, actions taken, results, and more. The record that person produces will serve both as a valuable reference guide should a similar situation arise in the future, but also as a resource to share with others and to demonstrate the credit union difference.”
Sadly, A Light Goes Out
While the reasons remain largely unknown, fireflies, or lightning bugs, have been disappearing in the United States. And now that goes for one of the best names in credit unions, too.
A cherished memory for many people of summers when they were kids, the firefly population in the United States has been on the decline. Forget catching them and putting them in a jar—in many places you’re lucky to find any at all.
In Minnesota, I’m sorry to say that holds true for Firefly Credit Union, whose name will disappear when/if a proposed merger is completed.
As CUToday.info reported, the $1.58-billion TruStone Financial Credit Union and the $1.42-billion Firefly CU in Burnsville said they plan to combine, with TruStone to be the continuing name.
Over the years I’ve written and reported on a countless number of name changes, some of which have been frankly baffling and others of which struck me as so bad it begged the question of how hammered was the focus group that said, yeah, we like the sound of that. That’s not the case with Firefly, which has been one of my all-time favorite new names (in this case for what a CU that began its life in 1925 as Minneapolis Postal Employees before changing its name to U.S. Federal Credit Union, dropped that last, rather cold-sounding moniker, for the infinitely warmer Firefly).
Firefly is so brandable, approachable and memorable. The marketing tie-ins are endless. It opens the door for a big billion-dollar institution to feel small and intimate; it evokes happy memories, especially in areas where fireflies are a summer staple (I mean has anyone every screamed in panic because a firefly was in the house?).
The credit union’s well-known former CEO has already expressed his concerns over the merger itself, but as is often the case with mergers of this size they are approved by mergers.
My assumption is when the deal is done TruStone Financial will retain the trademark, for how long, I don’t know. All I know is if I were a credit union looking to change my name I’d grab a jar and try to capture that name myself.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info.