NCUA Completes Taxi Medallion Loan Sale

The National Credit Union Administration today announced the sale of the majority of its taxi-medallion loan portfolio to Marblegate Asset Management LLC.

After thorough research and careful consideration, the NCUA determined this sale 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.

Of equal importance, this sale also 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.

The NCUA’s holdings included medallion loans from Melrose Credit Union and LOMTO Federal Credit Union, which supported the New York City taxi industry for nearly a century until their liquidations in 2018. To date, the Share 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. After careful consideration, investor outreach, and consultation with an independent financial advisor, the NCUA determined a single bulk sale was the best option to meet its statutory requirements and prevent any unnecessary volatility in the already stressed taxi medallion market.

The agency took all appropriate steps during the sales process to make sure multiple bidders were involved to ensure a competitive price and maximize any potential recoveries to the Share Insurance Fund. The NCUA vetted the credentials of all bidders to identify potential buyers that demonstrated the capability and willingness to work with borrowers in a good-faith manner. The agency also contracted with a third party to perform extensive background investigations to confirm the reputation and other representations made by each prospective buyer.

After this extensive review, the agency allowed two firms to advance to the final due diligence round. The agency then received two independent offers and selected Marblegate as the best, least long-term cost option to the Share Insurance Fund. The firm also demonstrated the best track record of working with borrowers in a good-faith manner. The NCUA fully expects them to work with borrowers consistent with the representations made during the selection process.

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.

Stakeholders can learn more about the NCUA’s response to the collapse of the New York City taxi medallion market and its support for borrowers and credit union members by visiting the agency’s public website at www.ncua.gov/news/responding-collapse-new-york-city-taxi-medallion-market.