NEW YORK–Delinquencies for at least one CU that makes taxi medallion loans in this city are way up, and may be a reason behind why a group of credit unions are petitioning a judge to grant an emergency hearing that could freeze the bulk of Uber’s business here.
The $2.1-billion Melrose CU, the $174-million Montauk CU, $718-million Progressive CU and $278-million LOMTO FCU earlier this summer filed suits against members of the city government, alleging they allowed Uber to illegally pick up street-hail passengers.
The attorneys, representing four credit unions that finance more than 5,000 Yellow Cab medallions, charge that the business models of Uber and other smartphone-based ride apps rely on “street hails” that only Yellow Cab drivers are allowed to pick up in accordance with the city’s charter.
In the last four weeks, the delinquencies for the loan portfolio of the Melrose have increased 22%, said Todd Higgins, the attorney representing the credit unions, told the New York Daily News.
The value of medallions, which for most years have remained solid, has dropped as app-based car services have begun capturing larger shares of the New York City market, dropping from more $1 million in 2013 to around $700,000 according to recent figures, the Daily News reported. Delinquencies at CUs that make taxi medallion loans traditionally have been very low.
The suits filed by the taxi CUs were recently consolidated under one judge.