Teachers Federal Credit Union in Hauppauge is establishing a physical presence in New York City, purchasing the assets of a financially troubled credit union.
TFCU has acquired the member shares, some loans and other assets of Melrose Credit Union in Queens for an undisclosed amount, officials announced.
Melrose has about 19,900 members who will continue to have access to Melrose’s one branch office in Briarwood, Queens, as well as TFCU’s 27 offices on Long Island. Their accounts remain federally insured up to $250,000.
TFCU CEO Robert G. Allen said the acquisition provides Melrose customers "with uninterrupted services" and protects their deposits. He said 27 of Melrose's 70 employees have been hired permanently by TFCU.
"We have wanted to expand to New York City and this is the first step," Allen said. "Branch locations are selected based on a number of criteria, including proximity to members." He said TFCU has made loans to city residents and businesses "for years."
Melrose, based in Briarwood, had assets of $1.1 billion as of June. TFCU had assets of $7.1 billion as of last month.
Last year, Melrose was taken over by the state Department of Financial Services after struggling financially. It has since been operated by the National Credit Union Administration, a federal agency.
The TFCU purchase, announced late Friday, occurred after the credit union administration determined that 96-year-old Melrose was insolvent, administration officials said.
TFCU did not buy any Melrose loans or other obligations tied to New York City taxi medallions, which have plummeted in value because of the popularity of Uber, Lyft, Via and other ride-share services.
Allen said this is the first time that TFCU has purchased the assets of an insolvent credit union. Melrose is the fifth federally-insured credit union to be liquidated this year, according to the credit union administration.
The administration "wanted a financially stable and capable credit union to come in and acquire assets and support members," Allen said.
TFCU, founded on Long Island in 1952, had 320,000 members as of last month and more than 700 employees.