NY regulator issues consent order to Melrose CU
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The New York State Department of Financial Services has issueda consent order to Melrose CreditUnion.
The Briarwood, N.Y.-based credit union is directed to correctand prevent the unsafe or unsound banking practices of law and regulation that thestate regulator and the NCUA had identified during their 2015 joint safety and soundnessexamination.
Melrose CU was also ordered to have a CEO "with proven abilityin managing a credit union or bank of comparable size and complexity, with experienceimproving asset quality of a low-quality loan portfolio." The credit unionshould have a qualified senior lending officer and CFO as well, according to theorder, dated July 8.
On July 15, the CreditUnion Journal reported the terminationof Melrose CU CEO Alan Kaufman. The credit union, which had recorded steep lossesrelated to taxi medallion loans, appointedSteven Krauser interim president and CEO, replacing Kaufman, the Credit Union Times reported later in July.
The consent order also required the credit union to formulateand submit to the superintendent of financial services of the State of New Yorkfor review a written plan that aims to reduce its risk position in each asset whichis classified "substandard" or "doubtful" in the Dec. 31, 2015,Report of Examination. The credit union should also eliminate from its book by sale,charge-off or collection all assets or portions of assets classified "loss"in the 2015 Report of Examination.
According to the order, the credit union should formulate andsubmit for review a written plan to "prudently reduce and manage its taxi medallionloan concentrations for New York, Chicago and Philadelphia."
The credit union was also directed to fund the identified allowancefor loan and lease losses shortfall, and to engage or employ an independent firmor individual or individuals to review its loans.