LOMTO Federal Credit Union of Queens, which shuttered last year due to plummeting medallion values, was acquired in October by Teachers Federal Credit Union. The acquisition comes exactly a month after Teachers Federal acquired another Queens institution done in by taxi loans: Melrose Credit Union.
LOMTO and Melrose, along with the failed Montauk Credit Union and First Jersey Credit Union, were specialists in lending to buyers and owners of taxi medallions. Before the rise of app-based service in 2014, the value of a taxi medallion soared to more than $1 million, and lenders came to see the loans as virtually risk-free. New York taxi medallions now sell for less than $200,000, often in foreclosure auctions.
Signature Bank and Medallion Financial also have reported big losses from taxi lending. The unraveling of the business has taken a toll on cabbies and medallion owners.
Source: Crain’s New York Business