With delinquencies still rising, Melrose CU conserved by state
The National Credit Union Administration announced that The New York State Department of Financial Services took possession of Melrose Credit Union, of Briarwood, N.Y., and appointed the NCUA as conservator.
Melrose CU, which has about $1.8 billion in assets and more than 23,000 members, was placed into conservatorship because of “unsafe and unsound practices.”
In calendar 2016, the credit union posted a massive net loss of nearly $99 million, according to its latest call report.
In 2015, Melrose CU reported 193 delinquent loans totaling more than $155 million, but those numbers shot through the roof in 2016, with the credit union reporting a total of 1,039 delinquent loans worth more than $500 milion outstanding.
As reported, Melrose CU has been badly hurt by the dramatic rise of smartphone-linked ride-hailing companies like Lyft and Uber, given that the credit union has long offered medallion loans to New York City taxi owners to purchase necessary licenses.
Deposits at Melrose CU will remain protected by the National Credit Union Share Insurance Fund, which is administered by NCUA. While continuing “normal member services,” NCUA will work to resolve issues affecting the credit union’s operations.