Sunday, April 1, 2018

Credit Union Sues San Francisco over Taxi Medallion Loans

San Francisco Federal Credit Union is suing the San Francisco Municipal Transportation Agency (SFMTA) seeking damages from defaulted taxi medallion loans.

The complaint states that the credit union partnered with SFMTA to finance taxi medallion loans. The credit union underwrote and financed over 700 medallions worth more than $125 million in taxi medallion loans.

The lawsuit alleges that the city did not enforce its own transportation code when it failed to crack down on ride sharing companies. As a result, the taxi medallion market has collapsed with no medallion sales in two years.

The credit union claims numerous borrowers have defaulted on their medallion loans with at least 99 medallion loans in foreclosure. The credit union further states that it has suffered million of dollars of losses.

The credit union stated that it "has charged off or increased reserves for loan losses associated with its taxi medallion portfolio by more than $10,000,000."

The lawsuit includes claims of breach of contract, breach of an implied covenant of good faith and fair dealing, violation of the SFMTA's fiduciary duty toward the credit union and negligent misrepresentation of the city's approach to the medallion market.

The credit union is seeking damages of $28 million, attorney fees, and an order requiring SFMTA to repurchase Transferable Medallions from the credit union.

The lawsuit was filed in Superior Court of San Francisco on March 27.

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