“Every lender must know that these loans are not worth more than $125,000.”
The private equity firm that purchased thousands of taxi medallion loans from the NCUA said it is helping beleaguered cab drivers who are having trouble repaying their loans, but a union representing drivers said much more help is needed.
“Lenders have to get much more reasonable,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, told CU Times.
However, a Marblegate spokesperson said the company is providing assistance to drivers.
“We continue to work with hundreds of borrowers on a case-by-case basis to right-size loans and lower monthly payments — saving them an average of more than $15,000 each year,” the spokesperson said.
And Marblegate has allowed drivers to defer payments to help them through the coronavirus crisis.
However, Desai said it remains unclear how the payment “holiday” will affect the interest and principal owned on the loans.
The taxi workers alliance will hold a press conference Thursday, with drivers running a caravan around New York City Hall and Wall Street. And the alliance promised a “surprise action” following that. During an earlier “surprise action,” the alliance blocked the 59th Street Bridge, which connects the boroughs of Manhattan and Queens.
The drivers also recently drove a caravan to Marblegate’s headquarters in Connecticut.
Marblegate purchased thousands of taxi loans from the NCUA, which held the loans as a result of the failure of credit unions that had made large numbers of taxi medallion loans.
As the value of those loans plunged, drivers were not able to repay their loans.
New York City officials had urged the agency to delay the sale of the loans so they could attempt to raise the funds needed to purchase loans so that drivers would be able to repay them at reasonable terms.
The NCUA sold the loans before that partnership could be formed. The agency has repeatedly refused to disclose the number of loans sold or the selling price.
Marblegate said it has resolved more than $215 million in debt for 483 loans and has forgiven $70 million in debt. The average monthly loan payment has been cut from $2,804 to $1,538, the company said.
That’s still not reasonable, according to the taxi workers alliance.
“Every lender must know that these loans are not worth more than $125,000,” Desai said. She said taxi ridership in the city decreased 90% in June compared with ridership in February.
She said the drivers cannot afford a monthly payment of more than $750 and that loans should be restructured so drivers will owe $125,000 in principal.
She said the City of New York should offer to become the guarantor of the loans.
Various proposals have circulated that would make the city the backstop on the loans. A city council task force earlier this year proposed a public-private partnership that would purchase the loans.
New York State Attorney General Letitia James filed a claim with the city comptroller’s office seeking $810 million to help drivers repay their loans. James charged that the city Taxi and Limousine Commission inflated the value of the medallions, resulting in drivers taking out loans they could not afford.
The claim was the first step before James could file suit and Comptroller Scott Stringer rejected the request.
Then, the pandemic struck, and the suit has not been filed.
In May, New York City Councilman Ritchie Torres joined with the developer of Wapanda, a ride-hailing service to try to form a public-private partnership to help medallion owners, but no program has been announced.