When New York state took over a small credit union in September, the reason it cited was “unsafe and unsound conditions” at the institution. The real reason may be Uber.
The New York City-based Montauk Credit Union had roughly $170 million in outstanding loans -- one-third of which were to taxicab operators that have been struggling to pay their bills since the growth of ride-sharing companies like Uber and Lyft.
Taxicab operators typically take out loans for medallions, the city-issued licenses that cabs need. A few years ago, medallions were a hot commodity in New York City. The city severely limits how many new licenses it issues every year, driving up the demand for them and their value. Just two years ago, a single license could sell for as much as $1.3 million, according to Standard & Poor’s (S&P) Capital IQ.Read Complete Article