NEW YORK—Montauk Credit Union, the troubled taxi medallion CU that was conserved by the state regulator in September, has merged into Bethpage FCU, NCUA announced Thursday.
The $6.2-billion BFCU is located in Bethpage, N.Y.
The majority of Montauk’s lending was in taxi medallion loans. The value of taxi medallion loans in New York—as well as in other cities across the U.S.—has dropped markedly due to ride sharing services such as Uber.
At the time of conservatorship, Montauk had 2,893 members and assets of $178.5 million, a very high asset-to-member ratio, reflecting the value of the medallion loans.
NCUA data shows that Montauk delinquencies rose to 2.96% through June of 2015, and had been steadily increasing in the previous year. In just six months, ROA dropped from 1.09% at the close of 2014 to -2.36% through June of 2015. Capital fell from 12.35% at the end of 2014 to 10.34% by the end of June, and 1.74% at the end of 2015.
NCUA previously stated that New York State Department of Financial Services placed Montauk into conservatorship on Sept. 18 because of unsafe and unsound conditions at the credit union. NCUA said that the state regulator and NCUA, which was appointed as conservator, worked together to address issues affecting the credit union’s safety and soundness. As conservator, NCUA said it determined that merging Montauk into Bethpage was in the best interests of its members.