Amid Pleas for Flexibility, NCUA Remains Noncommittal About Taxi Bailout Plan

Support appears to be growing in New York and on Capitol Hill for a public-private partnership to help beleaguered New York City taxi drivers burdened with massive loans, but the NCUA has not publicly committed its support for such a plan.

In a letter, Rep. Carolyn Maloney (D-N.Y.) asked NCUA Chairman Rodney Hood to stop the foreclosure or sale of taxi medallions the agency possesses until a city Medallion Task Force announces its plans.

And New York City Mayor Bill de Blasio said that the partnership is the “best idea I’ve heard so far.”

The NCUA said it is reviewing Maloney’s letter.

But William Mellin, CEO of the New York Credit Union Association and a member of the taxi medallion task force, called on the NCUA to have a “serious dialogue with representatives of the New York City Council and use that information as they manage their portfolio of medallion loans.”

The Medallion Task Force, formed by the city council, is likely to announce its plans later this month. It is expected to include a partnership that would purchase loans from taxi drivers and owners. Many of those drivers took out hefty loans from credit unions that have been liquidated as a result of the declining value of the medallions that were used as collateral.

When those credit unions—most notably Melrose Credit Union and LOMTO Federal Credit Union—were liquidated, the NCUA was left with the loans.

Recent reports have said that the agency may be preparing to auction off the medallions.

Maloney and others have said that if the medallions are sold through auction, the buyer likely will not be willing to negotiate with the owners.

“Accordingly, I respectfully request that the NCUA refrain from any further foreclosures on, or sales of, taxi medallion loans that it currently owns, in order to give the Medallion Task Force the time it needs to finalize and implement its debt relief plan,” Maloney said, last week, in her letter.

The NCUA said that disposition of the loans involves sensitive personal information and as a result, the agency cannot comment on specifics of its resolution strategy.

The also said the agency is committed to finding a solution that is sensitive to medallion holder needs, while minimizing losses to the Share Insurance Fund.

Mellin said that credit unions and the NCUA should look for every opportunity to work with borrowers to find ways that would allow them to pay their loans.

“Every loan is different, every institution is different, and every borrower is different, so a one-size-fits-all policy or approach may not make sense,” he said.

In a news conference last week, de Blasio reiterated his position that the city cannot afford a bailout and that while the public-private partnership seems like a good idea, the details have not yet been released.