In January, Manhattan-based Progressive Credit Union was folded into Virginia-based Pentagon Federal (PenFed) in an emergency merger approved by the National Credit Union Administration, according to a Jan. 7 article in Crain’s New York Business. PenFed is the nation’s second-largest federal credit union, with $24 billion in assets.
PenFed gets a Manhattan retail presence and banking operation with the merger, which was announced Jan. 1. Progressive’s employees and executives will stay on and continue servicing all of its members’ loans and savings accounts.
Industry turmoil caused by the unchecked growth of app-based transportation services in New York City has resulted in plummeting Taxi medallion values, historically bad traffic congestion and eight suicides. The industry’s credit unions and their clients were hit particularly hard. Many medallion loans fell into delinquency, and some ended in foreclosure, devastating not only their owners but also lenders who were “over-weighted” with what they once considered low-risk loans.
Progressive was the last of four major New York credit unions that focused on financing Taxi medallions. The others – Melrose, LOMTO and Montauk – were all liquidated or closed late last year and their assets assumed by other lenders or the National Credit Union Administration.
“It was a struggle, and it doesn’t make sense to struggle when you can find a partner as strong as PenFed,” said Robert Familant, who was Progressive’s CEO and treasurer. “The merger into an institution as large and robust as PenFed allows us to support our members. We are working with them to modify and restructure loans and do whatever is necessary to help them succeed. We’re at the same location, with the same phone number, and welcome people to call or stop by with any questions or concerns.”
Progressive members also have access to a wide range of services, including higher-than-market-rate CDs, attractive checking accounts and auto loans, according to Mr. Familant, who now serves as PenFed’s senior adviser in charge of PenFed’s New York office.
“It’s been a rough few years, but I’m optimistic about the industry,” added Familant. “The market appears to have hit bottom and stabilized, and now there are buyers out there.”
PenFed CEO James Schenck agrees that the “underlying value” of medallions are stabilizing and says the credit union would provide “time and liquidity” as it works with owners on their loans.
“By the end of this year, pursuant to local law passed last summer, TLC must report findings on surveyed medallion debt,” said Mr. Schenck. “The payments due at the beginning of each month are a bleak reality for many medallion owners. They have for decades been dedicated borrowers, many of them paying back more than owed every month, and for decades banks have earned interest on these loans. Lenders know the original price lent may not be recouped. Lowering principal, and restructuring these loans matching real revenue streams, will make a tangible difference in the lives of medallion owners, and it’s their lives that must be our paramount concern.”
For more information, visit https://progressivecu.org/ or call 212-695-8900.