NEW YORK–The Taxi and Limousine Commission here has implemented several new rule changes as it seeks to stabilize the market for taxi medallions, which continue to sink in value and which have broad implications for credit unions—and not just those involved in medallion lending.
In March, a new low was hit when a taxi medallion was sold for $241,000, a price point not seen since the early 2002. In 2014, a similar medallion sold for $1.05 million. Overall, there are 13,587 medallions in circulation in the New York City market that give yellow cabs the right to pick up street hails.
In the most recent change made by the Taxi and Limousine Commission, owners of a single medallion are now permitted to sell it to a fleet owner or to another so-called independent owner, according to Crain’s New York Business. Previously, those independent owners could sell only to a buyer who did not already own a medallion. A 2016 change, also in response to shrinking medallion values as ride-sharing services such as Uber become more widespread, repealed a regulation requiring independent owners to regularly drive the cab they own.
According to the Crain’s report, the new rules also “allow credit unions to work out arrangements with lease managers to take over foreclosed medallions and have them continue to earn money, rather than put them up for sale at distressed prices.”
To date, the depressed value of the medallions that serve as loan collateral has led regulators to take over Melrose Credit Union and Montauk Credit Union.
As CUToday.info has reported, other CUs have also invested in medallion loan participations. Some analysts have raised red flags, saying the failure of the taxi medallion CUs could have significant implications for the National Credit Union Share Insurance Fund.