WASHINGTON—Rep. Carolyn B. Maloney (D-NY), chair of the House Oversight and Reform Committee, has called on NCUA to place an immediate moratorium on both taxi medallion loan foreclosures and sales of taxi medallion loans currently owned by the agency.
The letter comes in light of a New York City Medallion Task Force proposal to provide as much as $500 million in debt relief to borrowers, Maloney’s office stated.
As CUToday.info reported here, NCUA has placed a portfolio of approximately 3,500 New York City and Chicago medallions up for sale. The NCUA wants any interested bidder to take on all the loans, not just those for the New York medallions. As CUToday.info reported earlier, NCUA has taken control of an estimated $1.5-billion in taxi medallion loans from the failed credit unions, which included Montauk CU, Melrose CU and Lomto CU.
In the letter, Maloney says that “for years, predatory lenders made unsustainable taxi medallion loans to taxi drivers in New York City— many of whom were immigrants and people of color. These loans, which were often fraudulent, trapped the borrowers in a never-ending cycle of debt, and fed an enormous speculative loan bubble.”
NCUA came to own the medallions following the liquidation of a half-dozen taxi medallion-lending credit unions that failed at a cost of nearly three-quarters-of-a-billion-dollars to the National Credit Union Share Insurance Fund.
Maloney argues that “if the NCUA sells its portfolio of taxi medallion loans—or forecloses on the loans—to private lenders before the Medallion Task Force’s proposal can be implemented, then much of the relief will never reach the borrowers.”
At their high point taxi medallions were selling for seven figures, but have since plunged in value as the result of ride-sharing services and from being overly aggressively marketed, according to some critics.