NCUA Says It’s Helping NYC Taxi Drivers 'Preserve Their Livelihoods'

As New York City mayor Bill de Blasio doubled down on his criticism of oversight of credit unions that loaned money to taxi drivers, the NCUA said Monday night that it is working with drivers to modify loans they cannot repay.

“Our goal is to help taxi drivers preserve their livelihoods while also ensuring they can afford to make payments on performing and sustainable loans,” NCUA spokesperson John Fairbanks said. “We understand that behind many taxi loans are individuals and families impacted by the harsh reality of the current taxi medallion market.”

Fairbanks’ comments came following a report by New York City officials that contended that the NCUA, which assumed control of taxi loans when credit unions failed, is being uncooperative with drivers attempting to negotiate better terms.

At a news conference Monday, de Blasio also questioned whether state and federal officials did enough to supervise credit unions that may have loaned money to drivers.

On Monday, De Blasio also released the report that was based on a 45-day review of the city’s supervision of the taxi industry. That review was prompted by a New York Times investigation that showed that many drivers did not understand the loans they were taking out.

The city said that it would tighten regulation of taxi brokers who, in many instances, helped drivers take out those loans, but officials said they could do nothing about the banks and credit unions that made the loans.

Two New York City credit unions, Melrose Credit Union, and LOMTO Federal Credit Union were taken over by the NCUA largely as a result of their heavy investment in taxi medallions. A third, Bay Ridge Federal Credit Union, was involved in an emergency merger.

The agency reported last year that the Share Insurance Fund lost more than $780 million last year, since credit unions that assumed control of the failing institutions did not assume control of the taxi loans.

“The NCUA, as liquidator for the failed credit unions, is working with these borrowers to modify credit union loans where possible through payment reductions, lower interest rates, or term adjustments,” Fairbanks said.

He said the agency’s efforts are complicated by the fluctuating value of the collateral used to secure loans and in some cases, the high level of cash-out refinancing.

“We remain committed to balancing the needs of these borrowers with meeting the congressionally mandated requirement for the NCUA to ensure the safety and soundness of credit unions and the National Credit Union Share Insurance Fund,” he said.

But de Blasio said state and federal credit unions should do more.

He said state and federal regulators should investigate their oversight of the taxi driver lenders, adding that the city has no power over banks and credit unions.

And de Blasio rejected the call for a city bailout for drivers.

“We do not have the capacity as a city to provide that,” he said. “I wish we did, but we don’t – that’s just the truth.”

But the head of the New York Taxi Workers Alliance, a group representing drivers, said that is exactly what the city should do.

“The Mayor’s recommendations don’t include debt forgiveness for a workforce facing an economic crisis that has already pushed three owner-drivers to suicide, and thousands to bankruptcy,” Bhairavi Desai , executive director of the group said.

She said that the city had not provided proper supervision of the taxi industry.

“Like it or not, this Mayoral administration has a moral obligation to step in and do right by a workforce so miserably failed by the very halls of power they now occupy,” she said.