The National Credit Union Administration (NCUA) denied an appeal of a Freedom of Information Act (FOIA) request denial for information related to the sale of taxi medallion loans by the agency.
On March 13, a FOIA request was filed seeking a copy of the sale agreement and any supporting documents related to the February 19, 2020 taxi medallion loan sale to Marblegate Asset Management LLC (Marblegate).
On April 14, NCUA denied the FOIA request. NCUA stated that the documents were withheld from public release under one or more of the FOIA exemptions at 5 U.S.C. § 552(b)(4), (5), and (8). In addition, the agency wrote "the requested documents are not agency records subject to the Freedom of Information Act."
On April 16, this denial was appealed. On May 14, NCUA denied the appeal.
This story first appeared at WashingtonCUDaily.com.
Read the letter.
Showing posts with label Taxi Medallions. Show all posts
Showing posts with label Taxi Medallions. Show all posts
Wednesday, June 10, 2020
Wednesday, February 26, 2020
NCUA's Hood Discusses the Process for Selling Off Taxi Medallion Portfolio
National Credit Union Administration (NCUA) Board Chairman Rodney Hood on September 25 provided more insights into the agency's process in selling off its tax medallion portfolio it assumed from failed credit unions.
Addressing the Credit Union National Association Government Affairs Conference, Chairman Hood commented that NCUA evaluated a number of options, but came to the determination that a singular bulk sale would be in the best interest to the National Credit Union Share Insurance Fund.
Hood told the audience that NCUA received bids for a portion of the medallion portfolio from interested bidders, but concluded that the sum of the subset bids were less than the bids for the overall portfolio.
He noted that NCUA in consultation with its financial advisors reached out to 23 firms with experience in handling distressed commercial assets. Six of these firms submitted bids. NCUA allowed two firms go through to the final due diligence bid round and received two independent offers. The agency turned away some firms because it lacked confidence that the firms would treat borrowers in a fair way.
Hood cautioned credit unions that "[h]olding these medallion assets beyond a reasonable period" could result in the agency repeating past mistakes. The past mistake is referencing the properties in Florida that were assumed by NCUA with the failure of Norlarco and Huron River Area Credit Unions.
Read the speech.
Addressing the Credit Union National Association Government Affairs Conference, Chairman Hood commented that NCUA evaluated a number of options, but came to the determination that a singular bulk sale would be in the best interest to the National Credit Union Share Insurance Fund.
Hood told the audience that NCUA received bids for a portion of the medallion portfolio from interested bidders, but concluded that the sum of the subset bids were less than the bids for the overall portfolio.
He noted that NCUA in consultation with its financial advisors reached out to 23 firms with experience in handling distressed commercial assets. Six of these firms submitted bids. NCUA allowed two firms go through to the final due diligence bid round and received two independent offers. The agency turned away some firms because it lacked confidence that the firms would treat borrowers in a fair way.
Hood cautioned credit unions that "[h]olding these medallion assets beyond a reasonable period" could result in the agency repeating past mistakes. The past mistake is referencing the properties in Florida that were assumed by NCUA with the failure of Norlarco and Huron River Area Credit Unions.
Read the speech.
Tuesday, February 25, 2020
NCUA's McWatters Defends Selling Taxi Medallion Portfolio
At the Credit Union National Association's Government Affairs Conference, National Credit Union Administration (NCUA) Board Member McWatters on February 24 defended the agency's decision to sell its portfolio of taxi medallion loans.
McWatters was responding to criticism the agency should have waited for a possible initiative from the New York Taxi Workers Alliance to form a public/private partnership to purchase the agency’s medallion loan portfolio.
However, McWatters stated that postponing the sale would have been inappropriate.
McWatters claims that if the agency postponed the sale, it would have lost the winning, least cost bidder.
The winning bidder, Marblegate Asset Management, was ready, willing, and able to close on the transaction, according to McWatters.
Postponing the sale would have most likely resulted in additional material losses for the National Credit Union Share Insurance Fund (NCUSIF), which would cause NCUA to "forgo distributions to credit unions for the intermediate future, if not longer."
McWatters told the crowd that NCUA "retained the services of outside consultants and investment advisors who assisted us in developing a plan to sell the taxi medallion loan portfolio pursuant to an open and transparent auction process."
In addition, McWatters addressed the topics of credit unions acquiring community banks and credit unions maintaining adequate capital and liquidity levels.
Read the speech.
McWatters was responding to criticism the agency should have waited for a possible initiative from the New York Taxi Workers Alliance to form a public/private partnership to purchase the agency’s medallion loan portfolio.
However, McWatters stated that postponing the sale would have been inappropriate.
McWatters claims that if the agency postponed the sale, it would have lost the winning, least cost bidder.
The winning bidder, Marblegate Asset Management, was ready, willing, and able to close on the transaction, according to McWatters.
Postponing the sale would have most likely resulted in additional material losses for the National Credit Union Share Insurance Fund (NCUSIF), which would cause NCUA to "forgo distributions to credit unions for the intermediate future, if not longer."
McWatters told the crowd that NCUA "retained the services of outside consultants and investment advisors who assisted us in developing a plan to sell the taxi medallion loan portfolio pursuant to an open and transparent auction process."
In addition, McWatters addressed the topics of credit unions acquiring community banks and credit unions maintaining adequate capital and liquidity levels.
Read the speech.
Sunday, February 23, 2020
Congressman Meeks Critical of NCUA's Decision to Sell Taxi Medallion Loans
Representative Gregory Meeks (D - NY) on February 20 stated he stands strongly against the sale of taxi medallion loans by the National Credit Union Administration (NCUA) to Marblegate Asset Management LLC.
In a statement, Meeks commented that while "some banks are recognizing the unsustainable bubble of medallion debt and providing debt forgiveness, it is discouraging to see NCUA move in the opposite and wrong direction."
Read the press release.
In a statement, Meeks commented that while "some banks are recognizing the unsustainable bubble of medallion debt and providing debt forgiveness, it is discouraging to see NCUA move in the opposite and wrong direction."
Read the press release.
Thursday, February 20, 2020
NCUA Completes Bulk Sale of Taxi Medallion Loans (updated at 8:19)
The National Credit Union Administration (NCUA) on February 19 announced the sale of the majority of its taxi-medallion loan portfolio to Marblegate Asset Management LLC.
After thorough research and careful consideration, NCUA determined this sale was the most appropriate action to meet its statutory obligation under the Federal Credit Union Act to achieve the least long-term cost to the National Credit Union Share Insurance Fund.
NCUA’s holdings included medallion loans from Melrose Credit Union and LOMTO Federal Credit Union, which supported the New York City taxi industry for nearly a century until their liquidations in 2018.
NCUA determined a single bulk sale was the best option to meet its statutory requirements and prevent any unnecessary volatility in the already stressed taxi medallion market.
The agency did not disclose the sale price.
However, the Wall Street Journal (subscription required) is reporting that Marblegate Asset Management was nearing a deal to buy almost 4,500 medallion loans for around $350 million, according to unnamed sources.
Read the press release.
Read the FAQ.
After thorough research and careful consideration, NCUA determined this sale was the most appropriate action to meet its statutory obligation under the Federal Credit Union Act to achieve the least long-term cost to the National Credit Union Share Insurance Fund.
NCUA’s holdings included medallion loans from Melrose Credit Union and LOMTO Federal Credit Union, which supported the New York City taxi industry for nearly a century until their liquidations in 2018.
NCUA determined a single bulk sale was the best option to meet its statutory requirements and prevent any unnecessary volatility in the already stressed taxi medallion market.
The agency did not disclose the sale price.
However, the Wall Street Journal (subscription required) is reporting that Marblegate Asset Management was nearing a deal to buy almost 4,500 medallion loans for around $350 million, according to unnamed sources.
Read the press release.
Read the FAQ.
Wednesday, January 22, 2020
NCUA Is Reviewing Rep. Maloney's Letter
Below is the response from the National Credit Union Administration (NCUA) to a question regarding Representative Maloney's January 17 letter about taxi medallion loans in its possession.
Q: In light of Carolyn Maloney's January 17 letter calling for a moratorium on taxi medallion loan foreclosures and sales to Chairman Rodney Hood, will NCUA stop foreclosing and selling taxi medallion loans in its possession?
A: The NCUA is reviewing Rep. Maloney’s letter. Because any disposition of these assets involves sensitive, personal financial information, the agency is unable to comment on any specifics regarding its resolution strategy. The NCUA remains committed to finding a solution that is sensitive to the needs of medallion holders and their families and that meets its statutory obligations to minimize potential losses to the Share Insurance Fund.
Sunday, January 19, 2020
Maloney Calls for NCUA To Immediately Stop Taxi Medallion Loan Foreclosures and Sales
Congresswoman Carolyn B. Maloney, Chairwoman of the Oversight and Reform Committee, on January 17 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.
Earlier this month, it was reported that NCUA was seeking to sell approximately 3,500 taxi medallions loans from failed credit unions in its possession by the end of January.
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.
Representative Maloney wrote that any foreclosure or sales of taxi medallion loans would be both premature and harmful to the many borrowers who were innocent victims of fraudulent lending practices.
Maloney argued that if NCUA sells its portfolio of taxi medallion loans before the Medallion Task Force recommendations can be implemented, then much of this relief will never reach the borrowers.
Read more.
Earlier this month, it was reported that NCUA was seeking to sell approximately 3,500 taxi medallions loans from failed credit unions in its possession by the end of January.
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.
Representative Maloney wrote that any foreclosure or sales of taxi medallion loans would be both premature and harmful to the many borrowers who were innocent victims of fraudulent lending practices.
Maloney argued that if NCUA sells its portfolio of taxi medallion loans before the Medallion Task Force recommendations can be implemented, then much of this relief will never reach the borrowers.
Read more.
Monday, January 13, 2020
NCUA Seeks to Unload Portfolio of Taxi Medallion Loans
Crain's New York (subscription required) is reporting that the National Credit Union Administration (NCUA) is seeking to unload its entire portfolio of approximately 3,500 taxi medallion loans.
NCUA wants bidders to take all medallion loans, not just those loans for New York City medallions. The agency is hoping to wrap up the sale by the end of January.
NCUA took possession of these loans after the failure of several credit unions that specialized in taxi medallion loans.
To enhance transparency, NCUA should summarize the book value, appraised value, and sales price of these loans. The agency should report this information by whether the loan is performing or nonperforming.
The Federal Deposit Insurance Corporation publishes this information on loan sales.
If NCUA fails to disclose this information, the NCUA's Inspector General should disclose this information.
NCUA wants bidders to take all medallion loans, not just those loans for New York City medallions. The agency is hoping to wrap up the sale by the end of January.
NCUA took possession of these loans after the failure of several credit unions that specialized in taxi medallion loans.
To enhance transparency, NCUA should summarize the book value, appraised value, and sales price of these loans. The agency should report this information by whether the loan is performing or nonperforming.
The Federal Deposit Insurance Corporation publishes this information on loan sales.
If NCUA fails to disclose this information, the NCUA's Inspector General should disclose this information.
Thursday, December 19, 2019
NY Times Examines Taxi King Role in the Bubble and His Relationship to CU
A December 5 New York Times investigative report on the rise and fall of New York's Taxi King, Evgeny A. Freidman, examines the role of Freidman in creating the taxi medallion bubble and his relationship to Progressive Credit Union.
This article is part of an investigative series on the disruption of New York City's taxi industry.
According to the article, Freidman turned to a family friend, Robert Familant, who was the CEO of Progressive Credit Union, to help finance his plans to take on more risk to increase the industry's profit and drive up the value of taxi medallions.
The article noted that between 1997 and 2004, Progressive’s loans enabled Freidman to buy about 100 medallions to expand his taxi fleet. The article further noted that Freidman during this time became a licensed broker helping some drivers to buy medallions, usually with loans from Progressive.
In 2006, Freidman embarked on a new strategy to increase the value of his taxi medallions. New York City was auctioning 54 medallion loans for $350,000. He won all 54 medallions by bidding $477,666.50 apiece.
According to the reporter, Progressive helped finance the purchases.
Records show that Freidman used this strategy at three additional auctions.
By overpaying, this inflated the value of taxi medallions enabling Freidman to borrow even more from lenders.
This inflating of the value of taxi medallions burdened purchasers of medallions with more debt.
This story would suggest that taxi medallion lending credit unions along with other lenders probably contributed to the taxi medallion bubble with their lending practices.
Read more (subscription may be required).
This article is part of an investigative series on the disruption of New York City's taxi industry.
According to the article, Freidman turned to a family friend, Robert Familant, who was the CEO of Progressive Credit Union, to help finance his plans to take on more risk to increase the industry's profit and drive up the value of taxi medallions.
The article noted that between 1997 and 2004, Progressive’s loans enabled Freidman to buy about 100 medallions to expand his taxi fleet. The article further noted that Freidman during this time became a licensed broker helping some drivers to buy medallions, usually with loans from Progressive.
In 2006, Freidman embarked on a new strategy to increase the value of his taxi medallions. New York City was auctioning 54 medallion loans for $350,000. He won all 54 medallions by bidding $477,666.50 apiece.
According to the reporter, Progressive helped finance the purchases.
Records show that Freidman used this strategy at three additional auctions.
By overpaying, this inflated the value of taxi medallions enabling Freidman to borrow even more from lenders.
This inflating of the value of taxi medallions burdened purchasers of medallions with more debt.
This story would suggest that taxi medallion lending credit unions along with other lenders probably contributed to the taxi medallion bubble with their lending practices.
Read more (subscription may be required).
Friday, October 4, 2019
NCUA Hood Says There Is No One-Size -Fits-All Solution to NYC Taxi Medallion Loans
In a September 3, 2019 letter to Representative Alexandria Ocasio-Cortez, National Credit Union Administration (NCUA) Chairman Rodney Hood responded to her and other members of the New York City (NYC) congressional delegation inquiries about taxi medallion loans by credit unions and efforts to modify loans for financially struggling taxi medallion owners.
Chairman Hood wrote that he shared her concerns for taxi drivers, but noted that there is no one-size-fits-all approach to resolving these challenges.
Chairman Hood wrote at the end of 2014, when medallion prices peaked, there were 8 federally insured credit unions that originated the vast majority of the loans secured by New York City taxi medallions. Those 8 credit unions held a combined $3.9 billion in assets. Today, six of those eight credit unions have either been liquidated or merged and are no longer in business. Only one of the six credit unions that are no longer in business was found to have engaged in indirect lending on a small portion of its taxi medallion portfolio.
Chairman Hood noted that in 2015 the average outstanding taxi medallion balance was less than $350,000.
The letter noted that that these credit unions had some deficiencies in their underwriting standards and ignored repeated warnings from the agency about the dangers of excessive concentration in taxi medallion loans.
Chairman Hood further wrote that NCUA is updating its examination scope requirements to ensure credit unions analyze a borrower's ability to repay the loan and to ensure the agency addresses, through informal and formal enforcement actions, any cases where the credit union is not properly undertaking this analysis. Those updated procedures will become effective with the release of the 2020 examination program.
The letter stated that bad actors should be held accountable and NCUA is aggressively pursuing institution-affiliated parties, who have violated the law, breached their fiduciary duties, and engaged in unsafe and unsound practices. However, the agency found no evidence that credit unions engaged in market manipulation.
Hood stated that NCUA, as liquidating agent for Melrose and LOMTO, is actively identifying distressed borrowers in an effort to rework their loans, where possible, including payment reductions, lower interest rates, and term adjustments. But Hood acknowledges that these efforts are complicated by the sharp decline in value of taxi medallions and, in some cases, the high level of cash-out refinancing activity that took place on individual loans.
The letter is below (click on images to enlarge).
Chairman Hood wrote that he shared her concerns for taxi drivers, but noted that there is no one-size-fits-all approach to resolving these challenges.
Chairman Hood wrote at the end of 2014, when medallion prices peaked, there were 8 federally insured credit unions that originated the vast majority of the loans secured by New York City taxi medallions. Those 8 credit unions held a combined $3.9 billion in assets. Today, six of those eight credit unions have either been liquidated or merged and are no longer in business. Only one of the six credit unions that are no longer in business was found to have engaged in indirect lending on a small portion of its taxi medallion portfolio.
Chairman Hood noted that in 2015 the average outstanding taxi medallion balance was less than $350,000.
The letter noted that that these credit unions had some deficiencies in their underwriting standards and ignored repeated warnings from the agency about the dangers of excessive concentration in taxi medallion loans.
Chairman Hood further wrote that NCUA is updating its examination scope requirements to ensure credit unions analyze a borrower's ability to repay the loan and to ensure the agency addresses, through informal and formal enforcement actions, any cases where the credit union is not properly undertaking this analysis. Those updated procedures will become effective with the release of the 2020 examination program.
The letter stated that bad actors should be held accountable and NCUA is aggressively pursuing institution-affiliated parties, who have violated the law, breached their fiduciary duties, and engaged in unsafe and unsound practices. However, the agency found no evidence that credit unions engaged in market manipulation.
Hood stated that NCUA, as liquidating agent for Melrose and LOMTO, is actively identifying distressed borrowers in an effort to rework their loans, where possible, including payment reductions, lower interest rates, and term adjustments. But Hood acknowledges that these efforts are complicated by the sharp decline in value of taxi medallions and, in some cases, the high level of cash-out refinancing activity that took place on individual loans.
The letter is below (click on images to enlarge).
Tuesday, September 10, 2019
Federal Prosecutors Open Probe into New York City Taxi Medallion Lending
The New York Times is reporting that the United States Attorney’s Office for the Southern District of New York has opened an investigation into possible lending fraud in the New York City taxi industry.
Federal agents have started to interview cabdrivers, who took on massive amounts of debt to purchase taxi medallions and were not fluent in English.
The investigation appears to be focused on possible crimes including bank, wire or mail fraud.
Read the story.
Federal agents have started to interview cabdrivers, who took on massive amounts of debt to purchase taxi medallions and were not fluent in English.
The investigation appears to be focused on possible crimes including bank, wire or mail fraud.
Read the story.
Monday, August 5, 2019
11 NY Lawmakers Write Regulators about Taxi Medallion Lending
Eleven New York lawmakers are calling for tougher oversight of New York City taxi medallion lending.
In a July 25 letter to federal banking regulators, the lawmakers have asked for information about:
The letter went to the heads of the Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, and the Office of the Comptroller of the Currency.
The lawmakers signing the letter were Representatives Alexandria Ocasio-Cortez, Adriano Espaillat, Nydia Velazquez, Yvette Clarke, Jerrold Nadler, Carolyn Maloney, Thomas Suozzi, Gregory Meeks, Jose Serrano, Grace Meng, and Hakeem Jeffries.
Read more.
In a July 25 letter to federal banking regulators, the lawmakers have asked for information about:
- entities involved in providing taxi medallion loans;
- whether the agencies have toughened oversight of the industry;
- are the agencies cooperating with any law enforcement investigations into lending practices;
- what extent the agencies or regulated entities have provided loan modifications, repayment plans, forbearances, or loan forgiveness options; and
- what gaps in regulatory oversight should be addressed to better protect taxi drivers and similarly situated individuals.
The letter went to the heads of the Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, and the Office of the Comptroller of the Currency.
The lawmakers signing the letter were Representatives Alexandria Ocasio-Cortez, Adriano Espaillat, Nydia Velazquez, Yvette Clarke, Jerrold Nadler, Carolyn Maloney, Thomas Suozzi, Gregory Meeks, Jose Serrano, Grace Meng, and Hakeem Jeffries.
Read more.
Wednesday, July 31, 2019
CU CEO Earns Almost $1.9 Million in 2017, Despite Problems with Taxi Medallion Loans
Despite losing almost $97.2 million for 2017, the CEO of Progressive Credit Union (New York, NY) was paid approximately $1.9 million.
The credit union's performance was adversely affected by defaulting taxi medallion loans arising from the disruption of the taxi medallion industry.
Robert Familant, CEO and Treasurer of Progressive Credit Union, had total compensation of $1,931,827 for 2017 with a base compensation of $1,870,722, according to the credit union's Form 990 (click on image to enlarge).
While Familant's compensation was scaled back from almost $2.3 million in 2016, this 2017 pay package seems to deny the reality of depth and scope of the problems facing the credit union.
The credit union had $470.6 million in assets at the end of 2017.
Progressive Credit Union was taken over by Pentagon Federal Credit Union (McLean, VA) via an emergency merger in early 2019.
The credit union's performance was adversely affected by defaulting taxi medallion loans arising from the disruption of the taxi medallion industry.
Robert Familant, CEO and Treasurer of Progressive Credit Union, had total compensation of $1,931,827 for 2017 with a base compensation of $1,870,722, according to the credit union's Form 990 (click on image to enlarge).
While Familant's compensation was scaled back from almost $2.3 million in 2016, this 2017 pay package seems to deny the reality of depth and scope of the problems facing the credit union.
The credit union had $470.6 million in assets at the end of 2017.
Progressive Credit Union was taken over by Pentagon Federal Credit Union (McLean, VA) via an emergency merger in early 2019.
Sunday, July 28, 2019
SF Taxi Drivers Receiving Letters Demanding Full Repayment
KPIX E is reporting that some San Francisco taxi drivers are receiving letters from a credit union demanding full repayment of balloon loans on their taxi medallions.
The drivers said they cannot afford to make the payments.
The loans were originated by San Francisco Federal Credit Union, which had the exclusive right to fund the purchase of taxi medallions. These loans were later sold as participation interests to other financial institutions.
Read the story.
The drivers said they cannot afford to make the payments.
The loans were originated by San Francisco Federal Credit Union, which had the exclusive right to fund the purchase of taxi medallions. These loans were later sold as participation interests to other financial institutions.
Read the story.
Sunday, July 21, 2019
Latest Auction Results: NYC Taxi Medallion Prices Tumble Further
Crain's New York Business is reporting that 60 New York City (NYC) taxi medallions sold in auction on July 17 for $110,500 per medallion.
The auction began with a stalking horse bid of $6.5 million, or about $108,000 per medallion.
Last week, only 3 out of 16 medallions to be auctioned off were sold with the top bid of $138,000.
These prices are not good news for the National Credit Union Share Insurance Fund and suggests losses may come in higher than initially estimated.
Read more.
The auction began with a stalking horse bid of $6.5 million, or about $108,000 per medallion.
Last week, only 3 out of 16 medallions to be auctioned off were sold with the top bid of $138,000.
These prices are not good news for the National Credit Union Share Insurance Fund and suggests losses may come in higher than initially estimated.
Read more.
Saturday, July 13, 2019
Taxi Medallion Sold for $138,000 in Auction
Crain's New York Business is reporting that the auction of foreclosed New York City taxi medallions owned by Aspire Federal Credit Union (Clark, NJ) on July 11 hit a new record low auction price.
Sixteen medallions were being auctioned, but only 3 medallions were sold.
The auction started at a price of $130,000 with the highest bid being $138,000 for one medallion. Two other medallions sold for $136,000 and $137,000.
When the auctioneer moved to a group of medallions with a floor price of $140,000, there were no bidders.
A year earlier, 131 medallions were sold in auction for $170,000 each.
The article notes that private sales of taxi medallions have recently gone for as low as $100,000, according to the Taxi and Limousine Commission.
This new price information would suggest that taxi medallion assets that are the possession of the National Credit Union Administration could experience an additional haircut.
Read the article.
Sixteen medallions were being auctioned, but only 3 medallions were sold.
The auction started at a price of $130,000 with the highest bid being $138,000 for one medallion. Two other medallions sold for $136,000 and $137,000.
When the auctioneer moved to a group of medallions with a floor price of $140,000, there were no bidders.
A year earlier, 131 medallions were sold in auction for $170,000 each.
The article notes that private sales of taxi medallions have recently gone for as low as $100,000, according to the Taxi and Limousine Commission.
This new price information would suggest that taxi medallion assets that are the possession of the National Credit Union Administration could experience an additional haircut.
Read the article.
Tuesday, July 9, 2019
Report Criticizes NCUA for Not Working with Struggling Taxi Medallion Owners
A report from the New York City Mayor's Office is critical of the National Credit Union Administration (NCUA) over its failure to work with struggling taxi medallion owners.
The report found that drivers had median debt of $500,000 -- well above the current value for New York City taxi medallions in the secondary market. Only 35 percent of the drivers owe less today than they originally borrowed. The report found that many drivers borrowed against their medallions for other purposes, such as home purchase, buying a car, or paying for college or education.
Fifty-one percent of the surveyed drivers stated they are struggling to pay their monthly bills and 26 percent were considering bankruptcy.
According to the report, credit unions and credit unions in NCUA receivership held about two-third of all medallion loans based upon survey results.
The report found that LOMTO Federal Credit Union and Melrose Credit Union had among the highest interest rates on taxi medallion loans at 4.6 percent and 4.5 percent, respectively. It also found that First Jersey Credit Union had the highest average monthly loan payment at $3,825.22.
The report noted that only 15 percent of drivers indicated that their lender had lowered their monthly payment or reduced their loan principal.
The report stated that credit unions taken over by NCUA are among the least likely lenders to work with taxi drivers struggling to afford their loan payments. For example, drivers reported that Melrose Credit Union had taken actions on only 9 percent of their loans to either lower their monthly payments or reduce their loan principal. Only 8 percent of drivers with a loan from LOMTO Federal Credit Union saw a lower monthly payment or a reduction in loan principal and no borrower from First Jersey Credit Union received a lower monthly payment or a principal reduction.
The report does not address the role of ride-sharing companies in disrupting the New York City taxi market.
If Congress decides to investigate NCUA's supervision with regard to medallion lending by credit unions, this report should provide grist for the mill.
Read the report.
The report found that drivers had median debt of $500,000 -- well above the current value for New York City taxi medallions in the secondary market. Only 35 percent of the drivers owe less today than they originally borrowed. The report found that many drivers borrowed against their medallions for other purposes, such as home purchase, buying a car, or paying for college or education.
Fifty-one percent of the surveyed drivers stated they are struggling to pay their monthly bills and 26 percent were considering bankruptcy.
According to the report, credit unions and credit unions in NCUA receivership held about two-third of all medallion loans based upon survey results.
The report found that LOMTO Federal Credit Union and Melrose Credit Union had among the highest interest rates on taxi medallion loans at 4.6 percent and 4.5 percent, respectively. It also found that First Jersey Credit Union had the highest average monthly loan payment at $3,825.22.
The report noted that only 15 percent of drivers indicated that their lender had lowered their monthly payment or reduced their loan principal.
The report stated that credit unions taken over by NCUA are among the least likely lenders to work with taxi drivers struggling to afford their loan payments. For example, drivers reported that Melrose Credit Union had taken actions on only 9 percent of their loans to either lower their monthly payments or reduce their loan principal. Only 8 percent of drivers with a loan from LOMTO Federal Credit Union saw a lower monthly payment or a reduction in loan principal and no borrower from First Jersey Credit Union received a lower monthly payment or a principal reduction.
The report does not address the role of ride-sharing companies in disrupting the New York City taxi market.
If Congress decides to investigate NCUA's supervision with regard to medallion lending by credit unions, this report should provide grist for the mill.
Read the report.
Wednesday, June 19, 2019
16 Foreclosed Taxi Medallions Owned by Aspire FCU to be Auctioned
On June 27, 16 New York City taxi medallions foreclosed by Aspire Federal Credit Union (Clark, NJ) will be auctioned.
The minimum bid is $130,000 for unrestricted medallions. At their peak, New York City taxi medallions were valued at more than $1 million.
There are 15 unrestricted medallions. One medallion is for a handicap medallion.
Bidders may present bids for one, multiple, or all medallions.
Read details of the auction.
The minimum bid is $130,000 for unrestricted medallions. At their peak, New York City taxi medallions were valued at more than $1 million.
There are 15 unrestricted medallions. One medallion is for a handicap medallion.
Bidders may present bids for one, multiple, or all medallions.
Read details of the auction.
Monday, May 27, 2019
Senator Schumer Writes NCUA over Predatory Taxi Medallion Lending
In a May 21 letter to the National Credit Union Administration, Senate Minority Leader Chuck Schumer (D-N.Y.) asked the regulator to conduct an immediate review of its supervisory practices in the wake of “deeply troubling conduct” by credit unions involved in New York’s taxi medallion business.
Schumer pointed to a recent investigation by the New York Times that found that many NCUA-regulated institutions “worked to artificially inflate taxi medallion prices while hooking taxi drivers with reckless, exploitative loans. As a result of these predatory practices, taxi drivers lost their life savings and were left with crushing debt once the market crashed and the value of these medallions rapidly decreased.”
A recent NCUA Inspector General report suggested that with a timelier and more aggressive supervisory approach, some of the losses cab drivers experienced could have been mitigated, Schumer added. He requested that NCUA to respond to Congress with changes that should be made to its current supervisory practices to protect these consumers against this type of predatory lending in the future.
Read the letter.
Schumer pointed to a recent investigation by the New York Times that found that many NCUA-regulated institutions “worked to artificially inflate taxi medallion prices while hooking taxi drivers with reckless, exploitative loans. As a result of these predatory practices, taxi drivers lost their life savings and were left with crushing debt once the market crashed and the value of these medallions rapidly decreased.”
A recent NCUA Inspector General report suggested that with a timelier and more aggressive supervisory approach, some of the losses cab drivers experienced could have been mitigated, Schumer added. He requested that NCUA to respond to Congress with changes that should be made to its current supervisory practices to protect these consumers against this type of predatory lending in the future.
Read the letter.
Tuesday, May 21, 2019
New York Attorney General to Launch Inquiry into Taxi Medallion Lending
The New York State Attorney General's Office announced on May 20th that it is beginning an inquiry into the lending and business practices that led to the taxi medallion crisis in New York City.
This inquiry comes after a two-part investigative report appearing in the New York Times. I reported on this earlier today.
The Attorney General's Office stated that the allegations in the New York Times story "are serious and must be thoroughly scrutinized."
This inquiry comes after a two-part investigative report appearing in the New York Times. I reported on this earlier today.
The Attorney General's Office stated that the allegations in the New York Times story "are serious and must be thoroughly scrutinized."
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