Will Medallion Losses Impact Potential Payout?

February 13, 2018 at 9:28 am Leave a comment

This one goes into the ‘don’t shoot the messenger’ category. NCUA’s agenda for this Thursday includes a discussion of its decision to merge the Corporate Stabilization Fund into the traditional Share Insurance Fund. When NCUA announced that it was deciding to do this last year, it was estimated that between $600 and $800 Million dollars could be available for return to individual credit unions.

Now for the part where I don’t want you to get too angry with me: NCUA made this announcement just as the value of medallion loans was sinking lower and lower. Clearly we are reaching a point where this could have a direct impact on the Share Insurance Fund. Most notably, the recently released 4th Quarter performance reports indicated that Melrose Credit Union’s net worth to total assets had tumbled to a   -13.79 in December from -5.10 in September.

In a worst case scenario, medallion losses could wipe out any windfall otherwise recognized from folding the Corporate Stabilization Fund into the Share Insurance Fund. One of the things I’ll be listening for at Thursday’s meeting is the extent to which NCUA has already taken these potential costs into account in debating what the appropriate premium for credit unions should be and what the appropriate size of any rebate should be as well.

More ADA Lawsuits

I don’t want credit unions to think that they are the only ones being subjected to ADA website lawsuits. Here is some information about two of the most recent ones I have spotted. In Gathers et al v. 1-800-FLOWERS.com, Inc. a Federal District Court Judge in Massachusetts recently denied the company’s request to have its ADA lawsuit dismissed. A second case is Kiler v. Rag & Bone Holdings, LLC. I haven’t had a chance to read the complaint yet but according to Law360, the lawsuit is bringing claims not only under the Federal ADA but New York State law as well. This could be an important development…

Speaking of websites, it is being reported that the NCUA is beginning to conduct website audits as part of examinations. If you’ve been subject to one of these, the Association would love to hear about it so that your pain can benefit others. On that note, kumbaya and enjoy your day.

Entry filed under: Legal Watch, Regulatory. Tags: , , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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