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The Taxi Medallion Loan
MessPresented by:
W. Samuel Capuano, CBA, CRP, CLROPrincipal, Internal Audit
9.30.19
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Agenda• Overview of the Problem• NCUA• In The News• Legislative Concerns• What’s It Mean For IA?
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Overview
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Overview• Taxi Medallions• Collateral Collapse• Loan Concentrations
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Taxi Medallions
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Taxi Medallions• NYC• Boston• Chicago• Philadelphia• San Francisco
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Collateral Collapse• 2013 Value = $1.3mm• 2018 Value = $250k• 2019 Value = $150k
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Collateral Collapse
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Loan Concentrations• Bayridge FCU• Melrose FCU• LOMTO CU
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Loan Concentrations
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Loan Concentrations• Too Many Eggs In One Basket• Loan Policy Exceptions (?)
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NCUA
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NCUA• Hood’s July 2019 Daily News Article
– What NCUA Is Doing
• NCUA 15-CU-03– FAQ
– “Unique Risks”– Speculative Nature
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NCUA – OIG-19-06• OIG-19-06 (3/29/19)
– Significant Concentrations in Medallion Loans– Unsafe & Unsound Lending Practices– Weak BOD & Management Oversight/Inadequate
RM Practices– NCUA Supervision Not Timely & Aggressive
Enough
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NCUA – OIG-19-06– 3 Recommendations to NCUA:
– ID Concentration Risk At CU’s– Revise Exam QC For High Concentration Risk– Update Exam Scope To Review CU’s Practice
On Analyzing Debt Service Requirements
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NCUA – What’s Next• Findings 1 & 2 By 12/31/20• Finding 3 By 1/31/20• Supervisory Priorities For 2020• 2020 Reg Exams
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In The News
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In The News• CU Today July 2019: SF FCU & Demand Letters
To Taxi Members• Daily News July 2019: Chairman Hood• NY Post 9/19: AOC Wants Bailout• NY Times 5/19: Not Just Uber/Lyft’s Fault• NY Post: 10 Articles Since June
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Legislative Concerns
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2020
Legislative Concerns• 8/16/19 Letter
– 11 NY Lawmakers– To NCUA & Bank Regulators– Want More Info– Has Reg Oversight Increased?
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What’s It Mean For IA?
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What’s It Mean For IA?• Review/Revise MBL IAP
– Policy Review– BOD/Management Oversight– Collateral Controls– Loan Concentrations
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What’s It Mean For IA?– ALLL Audit
– Proper Allocations?– Concentrations Factored In?
– 2020 Risk Assessment– 2020 Audit Plan
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W. Samuel Capuano, CBA, CRP, CLRO
Principal, Internal Audit
The Bonadio Group
518.250.7763 (Direct)
518.281.1072 (Cell)
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Thank You!