Harsh Words for NCUA as Taxi Workers Detail Bailout Plan
"The city and lenders broke the taxi industry and destroyed the lives of thousands of drivers."
A labor union representing New York City taxi drivers is calling on Marblegate Asset Management and the city to renegotiate the terms of taxi loans that the private equity firm purchased from the NCUA.
In unveiling a specific plan, the New York City Taxi Workers Alliance said taxi drivers cannot afford the terms of Marblegate’s offer to individually renegotiate the terms of the loans.
Twenty members of the New York City city council last month sent Mayor Bill de Blasio a letter asking him to support a plan that would make the city the guarantor of the taxi loans.
The taxi workers alliance said that is essential to the success of any plan.
“It is our firm belief that lenders will not offer borrowers debt relief unless the city provides a backstop,” alliance officials said.
The union Thursday morning formed a caravan from New York City Hall, with the intention of driving to Marblegate headquarters in Connecticut.
Marblegate purchased the loans from the NCUA, which assumed control of them after two large credit unions, Melrose and LOMTO Federal failed under the burden of unpaid loans that were secured with taxi medallions. The city’s taxi business had plunged as a result of the rise of ride-sharing services and has gotten even worse during the coronavirus crisis.
“Marblegate is the textbook example, paying a quarter for every dollar of debt that continues to strangle the borrower,” the alliance said. “NCUA, after being a central agent in the predatory lending scandal, turned around and rushed a sale to Marblegate, rather than engaging with the borrowers.”
“The city and lenders broke the taxi industry and destroyed the lives of thousands of drivers,” said Bhairavi Desai, executive director of the taxi workers alliance.
City officials and the taxi workers alliance accused the NCUA of selling the loans before they were able to form a city-private partnership that would have offered the drivers loan terms they could afford.
The taxi workers union said that Marblegate purchased some 3,000 loans reportedly at an average cost of $115,000.
Marblegate has offered negotiating a loan balance of $300,000 refinanced over 27 years, at 5% interest, the alliance said. Drivers would have to pay $25,000 up front. It would require a monthly payment of $1,700—far more than drivers can afford, they said.
By contrast, the taxi workers union is offering a plan to restructure the loans to $125,000 for 20 years, with a payment of $757 a month and 4% interest.
The alliance said under that plan, if a loan is foreclosed and the medallion backing it are put up for bid, the city would agree to place the minimum bid on the loan.