NEW YORK–The City of New York has announced a new plan to help New York taxi drivers who have been suffering after taking out large loans—including from a number of now defunct credit unions—for taxi medallions that have crashed in value.
The city has announced new Medallion Relief Program that offers $65 million to help medallion owners restructure their loans, reduce principal and lower monthly payments. It said those funds will have a $500-million multiplier effect in terms of debt forgiveness for medallion owners in financial distress.
That distress has led some medallion owners to declare bankruptcy and even commit suicide.
The program also seeks to guarantee loans that are now owned by Marblegate Asset Management, the Connecticut firm that purchased the loans from NCUA. NCUA sold approximately 3,500 loans to the company for $350 million in 2020. NCUA acquired the loans from credit unions that specialized in the medallion loans, including Melrose CU and LOMTO CU, that were placed into conservatorship as the value of their portfolios sank as the popularity of ridesharing services grew and taxi drivers lost their monopoly on transporting people in the city.
The result was an approximate $750-million hit to the NCUSIF and to the credit unions that fund it.
Legal Representation Offered
“The Medallion Relief Program (MRP) and Loan Guaranty Program (MRP+) provide debt relief for eligible medallion owners,” the city said. “Both programs provide financial assistance and free legal representation to help medallion owners negotiate with lenders to reduce loan balances and lower monthly payments. Medallion owners with five or fewer medallions are eligible to apply.”
More information can be found here.