Are NCUA’s lending standards too tough?
When state chartered credit union Melrose CU was placed in conservatorship in February, New York’s Department of Financial Services put NCUA in control. Fast forward to Friday: The WSJ is reporting that the Committee for Taxi Safety, a Long Island City-based organization advocating for the medallion industry, sent a letter to NCUA Chairman J. Mark McWatters complaining that, in the aftermath of NCUA’s takeover, Melrose’s medallion loan terms have become too severe. It is demanding large down payments, imposing high interest rates and seeking peoples’ homes as collateral. Neither NCUA nor the DFS was willing to respond publicly to these concerns. According to the committee’s President David Beier, medallion owners can survive, but only if lenders (i.e. NCUA) show more flexibility.
The letter comes at a key time for the medallion industry. One medallion sold for a new low of $241,000, but many within the industry argue that this sale was an outlier and that medallion prices are stabilizing at approximately $550,000.
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