NCUA conserves LOMTO FCU in wake of medallion lending struggles
The National Credit Union Administration announced Monday that it has placed the $236 million LOMTO Federal Credit Union of Woodside, N.Y., into conservatorship due to “unsafe and unsound practices” uncovered at the credit union
The third conservatorship announced in as many business days (following conservatorships of Citizens Community and Riverdale CUs), LOMTO is at least the third credit union whose troubles can be traced back to taxi medallion lending, which has taken a big hit with the advent of Uber, Lyft and other ride-sharing apps. Montauk and Melrose Credit Unions have also been place into conservatorship.
During the period of conservatorship, NCUA said it will ”work to resolve issues” affecting the institution’s safety and soundness while maintaining normal member services.
Normal member services at the credit union’s offices at 5024 Queens Boulevard in Woodside and 180 Riverside Boulevard in Manhattan will continue uninterrupted, the agency said, noting that member deposits are federally insured up to $250,000 per individual account.
Chartered in 1936, LOMTO FCU serves multiple occupational and associational groups and communities primarily located in New York. These groups include employees and members of the League of Mutual Taxi Owners Inc., and employees of the American Transit Insurance Co. who work in New York, among others.
According to its call reports, LOMTO FCU posted net income of about $462,000 in the first quarter of 2017, after incurring losses of about $18.6 million in 2016.
Meanwhile, LOMTO FCU’s volume of delinquent loans has been increasing – to about $42.8 million at end of first quarter 2017 from $30.9 million at year-end 2016.
In addition, as of the end of the first quarter of 2017, the credit union’s foreclosed and repossessed assets reached about $13.7 million, from about $11.3 million at year-end 2016.
Separately, according to a report in the Chicago Tribune, LOMTO FCU has filed 28 lawsuits against various taxi owner-operators thus far this year in Cook County Circuit Court in Illinois.