Rep. Maloney Calls on NCUA to Place an Immediate Moratorium on Taxi Medallion Loan Foreclosures and the Sale of Taxi Medallion Loans to Provide Critical Relief to Borrowers

Jan 17, 2020
Press Release

NEW YORK, NY- Congresswoman Carolyn B. Maloney, Chairwoman of the Oversight and Reform Committee, today called on the National Credit Union Association (NCUA) to place an immediate moratorium on both taxi medallion loan foreclosures and sales of taxi medallion loans currently owned by the NCUA.

 

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.

 

In the letter, Congresswoman 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.”

 

After many of the lenders that issued these predatory loans failed, the NCUA took over a large portfolio of taxi medallion loans.

 

She argues that “if the NCUA sells its portfolio of taxi medallion loans- or forecloses on these loans- to private lenders before the Medallion Task Force’s proposal can be implemented, then much of the relief will never reach the borrowers.”

 

Full text of the letter below and a PDF here.

 

 

 

 

January 17, 2020

 

The Honorable Rodney Hood

Chairman

National Credit Union Association

1775 Duke Street

Alexandria, VA 22314

 

Dear Chairman Hood:

 

                I am writing to request that the National Credit Union Association (NCUA) place an immediate moratorium on both taxi medallion loan foreclosures and sales of taxi medallion loans currently owned by the NCUA. In light of the forthcoming proposal from New York City’s Medallion Task Force,[1] I believe any foreclosures on, or sales of, taxi medallion loans owned by the NCUA would be both premature and harmful to the many borrowers who were innocent victims of fraudulent lending practices.

 

                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.[2] These loans, which were often fraudulent, trapped the borrowers in a never-ending cycle of debt, and fed an enormous speculative loan bubble. When many of the lenders that issued these predatory loans failed, the NCUA, in its capacity as receiver, took over a large portfolio of taxi medallion loans.

 

                In response, New York City established a Medallion Task Force to examine proposals to provide much-needed relief to borrowers. Last night, the New York Times reported that the Medallion Task Force intends to propose a plan that would provide as much as $500 million in debt relief to borrowers.[3] However, if the NCUA sells its portfolio of taxi medallion loans — or forecloses on these loans — to private lenders before the Medallion Task Force’s proposal can be implemented, then much of the relief will never reach the borrowers.

 

                Accordingly, I respectfully request that the NCUA refrain from any further foreclosures on, or sales of, taxi medallion loans that it currently owns, in order to give the Medallion Task Force the time it needs to finalize and implement its debt relief plan. In light of the time-sensitive nature of this decision, I request your response to this letter by Wednesday, January 29, 2020.

 

 

 

Sincerely,

 

Carolyn B. Maloney (NY-12)

Member of Congress

 

 

 

[1] See Brian M. Rosenthal, Bailout Up to $500 Million Proposed for Taxi Drivers Trapped in Loans, New York Times (January 15, 2020), available at https://www.nytimes.com/2020/01/15/nyregion/nyc-taxi-medallion-bailout.html.

[2] See generally Brian M. Rosenthal, As Thousands of Taxi Drivers Were Trapped in Loans, Top Officials Counted the Money, New York Times (May 19, 2019), available at https://www.nytimes.com/2019/05/19/nyregion/taxi-medallions.html.

[3] See Brian M. Rosenthal, Bailout Up to $500 Million Proposed for Taxi Drivers Trapped in Loans.