First Uber victim: New York State regulators seize taxi-medallion lender. Montauk Credit Union was taken over by the government for 'unsafe and unsound' practices.

Crain's New York Business reports:

Montauk Credit Union, a big lender to taxi-medallion owners, was seized Friday by New York state regulators.

The action taken by the New York state Department of Financial Services against Manhattan-based Montauk could be just the first. Several other credit unions have lent heavily against taxi-medallions, which are fast losing value due to the rise of Uber.

Montauk, along with Melrose Credit Union, Lomto Federal Credit Union and Progressive Credit Union, sued the city and state attorney general’s office over the summer, urging them to stop Uber drivers from picking passengers who hail them using smartphones. But last week a state judge ruled against the lenders.

About $50 million on Montauk’s $167 million loan book is tied up in taxi-medallions, but the credit union had only $18 million in capital and about $6 million in reserves to absorb losses, according to a regulatory report. That’s a problem because as passengers hail fewer cabs, borrowers are falling behind on their loans and delinquencies are rising fast. Taxi medallions were worth as much as $1.1 million in 2013 but fell to $700,000 this past February. Last month, two sold for $875,000 each. One is now listed for sale on NYCitycab.com for $550,000.

Montauk has $13 million in loans that are 30 to 59 days overdue and about $4 million that are 60 days or more delinquent. In addition, it reports another $38 million in "troubled debt restructurings."

The rent-seeking coalition loses one.