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NAFCU's Share Insurance, Liquidity and Development Fund Oversight Committee (SIF Committee) – in a letter yesterday to NCUA Chairman Rodney Hood – shared its analysis regarding the NCUA's "stewardship of taxi medallion loans acquired through the resolution of credit unions which held such loans in high concentrations."

"We note that such a large amount of assets under active management by the NCUA's Asset Management and Assistance Center (AMAC) is without recent precedent," the letter stated.

The committee said it supports NCUA's efforts to obtain "an expeditious a sale as possible, so long as the agency is able to get a fair price for the portfolio."  The question of what constitutes a fair price is one that could pose a challenge.

"NAFCU members have expressed questions and concerns relative to the factors NCUA will use to determine whether or not an offer represents fair pricing, given the rarity of these transactions in the open market," the committee wrote. "Ultimately, if it is determined that a fairly-priced transaction is not feasible at this time for the entire portfolio of medallion loans, the NCUA should consider exploring other avenues to achieve a fair price in the most expeditious way possible."

In addition, the committee urged the NCUA to manage the assets transparently to the extent that it could without impacting safety and soundness.

Hood, in a July op-ed, said the agency would work to balance the needs of borrowers with minimal losses to the SIF. A NAFCU Compliance Blog post from last year also noted that taxi medallion loans were identified in the Office of Inspector General material loss reviews.

NAFCU will continue to monitor this issue to ensure credit unions are not negatively impacted.