Amid Urgent Calls for Help, NYC Taxi Medallion Task Force to Meet With NCUA Officials
The meeting is confirmed on Friday, as the task force released its report on the state of NYC's taxi industry.
Leaders of the New York City taxi medallion task force will meet with NCUA officials next week to outline their urgent request for the agency to delay the sale of taxi medallion loans so that city officials can form a public-private partnership to purchase the loans.
Confirmation of the meeting came Friday, as the task force released its report on the state of the city’s beleaguered taxi industry.
The task force is urging the NCUA to delay the sale of medallion loans so the public-private partnership can be put together to purchase the loans.
“Mission-driven investors — i.e., public or private investors who are interested in helping over-indebted medallion owners and supporting an iconic New York industry while also earning a moderate return — could employ a similar, but more borrower-favorable approach,” the task force said.
A member of the task force said she is pleased that NCUA officials have said they are willing to meet with the group.
“The NCUA was true to its word and followed up with us for a meeting with senior staff,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said. “It’s a start. Drivers feel heard and we are looking forward to working with them.”
Members of the taxi alliance attended last week’s NCUA board meeting and met informally with board members J. Mark McWatters and Todd Harper, as well as Chairman Rodney Hood.
“We will be putting pressure on them the same way we’ve been putting pressure on the lenders,” Desai said at a news conference on the steps of New York City Hall.
The NCUA has repeatedly refused to discuss this issue with CU Times, despite numerous requests for comments.
The task force said if the NCUA sells loans to a private business, such as a debt collector, that business could press medallion owners to repay the entire amount of the loan, even though that business likely purchased the loan at a steep discount.
On the other hand, if a public-private partnership purchased the loans at a discount, that group could require borrowers to only repay that amount.
The report specifically asked the federal government to make a commitment to establishing a debt purchase and modification program for those drivers.
The city’s Taxi and Limousine Commission, with governs the taxi industry, has little power over loan issues, the task force said. Those issues are handled by state and federal officials.
And the report said borrowers have had little success in negotiating with lenders.
“Borrowers appear to have had little success getting lenders to agree to reduce the outstanding principal on their loans to levels more in line with current medallion values,” the report said.
And while the report cited the rise of ride-sharing companies such as Uber and Lyft as primary causes of the taxi medallion crisis, the task force said the NCUA and the credit union industry is not without blame.
Credit unions were willing to make very risky loans to drivers who most likely did not understand the terms of the loans, the task force said. In addition, medallion brokers linked unsuspecting drivers to favored lenders.
“Some brokers may have directed medallion owners toward specific lenders whose loan documents included terms that were unfavorable to the borrower but very favorable to the broker,” the task force said.
The report also recommended Congress or the New York state legislature enact laws that would require financial institutions to establish that such borrowers have an ability to repay their loans before the loan is approved.
The task force also recommended a ban on a controversial practice known as confessions of judgement, a legal document that allows lenders to obtain a monetary judgement against a borrower without providing notice to the borrower.
The taxi crisis has brought down two major credit unions that were involved in making loans to drivers — Melrose Credit Union and LOMTO Federal Credit Union.
The task force acknowledged that taxis have been unable to effectively compete with ride-sharing companies such as Uber. And it recommended that the city adopt surge-pricing, a system in which taxi drivers would charge higher fares when cabs were in demand.
The report estimated the NCUA was left holding some $1 billion in taxi loans. The agency has said taxi loans cost the Share Insurance Fund more than $700 million.