NCUA Says CUSO Can Serve as Taxi Medallion Loan Broker
A CUSO seeking to act as a loan broker for loans used to finance the purchase of New York City taxi medallions is permitted to do so, the NCUA said.
In an Oct. 1 opinion letter, the regulator responded to a request for clearance regarding a federal credit union that serves New York City taxi owners that formed a CUSO to provide loan services for granting of loans to members buying taxi medallions. The CUSO wants to buy an existing medallion loan broker's business. The loan broker handles certain loan processing and loan closing activities such as verifying medallion ownership and title, organization of loan-related documents, and release of lien filings but does not fund the loan. The CUSO would submit loan applications from members to CU lenders.
"In simple, broad terms, a loan broker acts as an intermediary between a borrower and a lender, bringing the parties together. We view the loan broker activity described as permissible under the pre-approved category of 'loan support services,'" wrote Hattie Ulan, NCUA associate general counsel. Ulan reiterated that a CUSO cannot originate or fund a loan for the purchase of a taxicab medallion. The ownership and operation of a yellow medallion taxicab in New York City and the sale and transfer of medallions are subject to various limitations and requirements not addressed in the NCUA opinion letter, she noted.