Montauk Credit Union in New York has taken numerous steps to improve its operations since being placed into a conservatorship in September, according to the National Credit Union Administration.
The New York State Department of Financial Services took possession of the $162 million-asset institution in September due to "unsafe and unsound conditions." Montauk had been overwhelmed by nonperforming taxi-medallion loans; delinquencies on its business loans had surged to 10%.
Since then, Montauk CU has modified $60.6 million of loans, the NCUA said in a Wednesday news release and taken "several steps to address financial and management issues affecting the safety and soundness of its operations," the regulator noted.
Montauk hired loan workout specialists to help with collections. And it hired professional accounting consultants to assess whether it was carrying an adequate allowance for loan and lease losses. The CU also increased its allowance for loan losses to $21.9 million, from $5.5 million, during the fourth quarter.
Montauk CU wasn't the only financial institution slammed by problems in the taxi industry, as ride-sharing apps like Lyft pummeled the value of taxi medallions. Signature Bank and New York Community Bancorp, both in New York, and BankUnited in Miami Lakes, Fla., all reported high concentrations of taxi-medallion loans.