Taxi Union Urges NYC to Settle Complaint, Provide $810 Million to Repay Loans

The union representing many of New York City’s taxi drivers and owners is urging city officials to settle a state complaint and provide $810 million to help drivers repay loans they cannot afford.

The NCUA held many of those loans and sold them to Marblegate Asset Management, a hedge fund, last month.

The New York Taxi Workers Alliance was scheduled to hold a rally on the steps of City Hall Wednesday in support of a complaint filed by State Attorney General Letitia James.

“Instead of a protracted legal battle, which would take up resources of both the city and the state, we are proposing a solution that would lessen the city’s financial costs, and in fact, limit the majority of the cost to an investment rather than a payout,”  Bhairavi Desai, the alliance’s executive director, said.

James filed the complaint with the comptroller of New York City, Scott Stringer, who has until March 21 to respond. If he denies the claim, James can then file suit against the city.

That complaint charges that the New York Taxi and Limousine Commission inflated the value of thousands of taxi medallions between 2004 and 2017. As a result, drivers and owners had to take out large loans to finance the purchase of those medallions.

Two credit unions, Melrose Credit Union and LOMTO Federal Credit Union, made many of those loans and when the value of the medallions plunged, drivers could not repay the loans. The credit unions were liquidated and the NCUA assumed control of the taxi loans.

The agency last month sold the loans to Marblegate and has continued to refuse to provide specific details about that sale.

Desai said if the city settles the complaint, James could then create a fund to help drivers repay the loans.

She said her organization has had initial meetings with Marblegate and would like to establish a system in which loan balances would be set at $150,000, with drivers and owners making payments of $900 a month.

She also called for drivers who are 62 years or older to receive $150,000 because they have seen their retirements disappear as a result of the plunging value of the medallions.

“We are counting on the comptroller to see that a settlement that just purchases loans with written down principals and refinances to the individual, and offers restitution in cash only for the seniors who will not be able to recoup their total losses, is the fairest outcome for everyone involved, especially the city,” she said.