NEW YORK—Add Congressman Gregory Meeks (D-NY) and CUNA to the list of people and organizations questioning NCUA’s recent sale of its taxi medallion loans to Marblegate Asset Management LLC.
Meeks joins fellow New York Congresswoman Carolyn Maloney, who had earlier called for a delay in the sale.
As CUToday.info has reported, Chip Filson, a former senior executive at NCUA and long-time voice in credit unions, is blasting the agency’s sale of its taxi medallion portfolio, calling it a “betrayal.”
As CUToday.info reported here, the agency has sold the majority of its taxi-medallion loan portfolio to Marblegate Asset Management LLC., in Greenwich, Conn. As CUToday.info further reported here, all three NCUA board members—with representatives of taxi medallion owners and borrowers sitting in front of them at the monthly board meeting—have attempted to explain why the sale was made, with only Board Member Todd Harper saying he would have preferred another option.
‘Enormous Strain’
In a released statement Meeks said, “Taxi drivers have suffered enormous financial strain as a result of the medallion system’s broken promise. Not only were medallions massively over-valued, but drivers were then left to compete in an uneven market with little to no hope of ever paying off their debt. NCUA’s decision to sell off that debt to a hedge fund only compounds that hardship, abandoning them to debt collection practices that will squeeze them for every last dollar.
“Earlier this year I introduced legislation to provide relief for indebted medallion owners in the event lenders forgave their debt, exempting them for tax liabili
ty on that amount. Just as some banks are recognizing the unsustainable bubble of medallion debt and providing debt forgiveness, it is discouraging to see NCUA move in the opposite and wrong direction,” continued Meeks. “I stand strongly against NCUA’s decision (on Feb. 23), and urge medallion owners to not abandon all hope for financial relief as the City, State and Federal government work to provide the justice they deserve.”
CUNA Response
Meanwhile, CUNA’s chief advocacy officer, Ryan Donovan, has also raised questions about the process and decision related to the sale.
“[The] NCUA has been working on this for more than 18 months without engagement of the credit union system, despite repeated attempts by CUNA, leagues and credit unions to engage the agency to provide alternative solutions to a fire sale of the medallions,” Donovan said in a statement.
CUNA and several state associations had been working with the NCUA, urging the agency not to sell the medallions to a single buyer. Donovan said CUNA wants to know why this recommendation “was ignored” and “how the agency decided to sell the loans to a hedge fund and the legal authority behind the sale.”