Taxi medallion loans, held since several credit unions making the advances were liquidated in 2018, have been sold by the federal credit union regulator, the agency said Wednesday.
In a release, the National Credit Union Administration (NCUA) said the sale of the loan portfolios of the liquidated credit unions, Melrose Credit Union and LOMTO Federal Credit Union – both of New York – was “the most appropriate action to meet its statutory obligation under the Federal Credit Union Act to achieve the least long-term cost to the National Credit Union Share Insurance Fund” (the federal credit union savings insurance fund).
The agency also asserted that the sale – to Marblegate Asset Management LLC – “provides borrowers and their families greater certainty about the management of their loans. Private entities have specialized skills and greater resources and flexibility to work with borrowers in ways the NCUA cannot.”
NCUA did not reveal the sale price. However, the agency did note that, since the credit union liquidations in 2018, the savings insurance fund “has lost more than $760 million because of these and other credit union failures related to taxi medallion loans.”
“For nearly 18 months, the NCUA evaluated a variety of approaches for resolving this portfolio, including holding and servicing the loans, pooled sales, structured sales, and securitization,” the agency stated.
In selecting the firm to buy the portfolio, the credit union regulator said it was the best, least long-term cost option to the savings insurance fund out of the two buyers the agency considered. NCUA also said Marblegate “also demonstrated the best track record of working with borrowers in a good-faith manner.”
The agency also noted that “there is nothing associated with this transaction that prevents a public-private partnership or any private investor from seeking to purchase these assets at a later date.”