NYLAG’s Rose Marie Cantanno spoke with New York Focus about the crippling debt that, despite the City’s relief deal, continues to plague taxi medallion owners. While the plan was designed to ease financial strain for taxi drivers — many of whom are lower income immigrants — we’re still seeing drivers struggle under the burden of high loan payments for medallions of declining value, in many cases because some of the lenders never agreed to sign on to the program in the first place.
“Over the past couple of decades, more than 2,000 taxi drivers have racked up hundreds of millions of dollars in debt to purchase medallions, the small metal plates that serve as licenses for New York City’s yellow cabs. When Uber, Lyft, and then the Covid-19 pandemic arrived on the scene, the value of those medallions plummeted, leaving drivers suffocated by debt.
“MRP+ was supposed to fix that problem. Under the program — negotiated between the city, the formidable New York Taxi Workers Alliance representing taxi and rideshare drivers, and Marblegate, an investment bank that held the greatest share of medallion loans — the city has restructured medallion loans for nearly 2,000 drivers, using about $100 million in public funds to convince lenders to wipe away nearly $400 million in debt.
“But thanks to lenders who are refusing to go along with the plan, between 250 and 400 drivers remain left out of the medallion debt deal, according to a NYTWA estimate, stuck with hundreds of thousands of dollars apiece in loans they cannot repay. One of them is LeConte, whose lender — a Manhattan-based company called S & R Medallion Corp. — refused to sign on. S & R offered to give her the medallion for $130,000 in cash, she said; if not, her debt would remain at more than $200,000 with steep monthly installments…
“Some lenders, such as PenFed Credit Union, another large institutional investor, readily signed on. But others continue to hold out. These include smaller financial firms, like BGW Holdings and OSK (formally O’Brien-Staley Partners/OSP), that had purchased medallion loans at a discount in recent years. Others, including S & R and Medallion Financial Corp., had provided the original loans when medallion values were wildly inflated, before the rise of Uber and Lyft.
“According to Rose Marie Cantanno, an attorney at the New York Legal Assistance Group who has sat in meetings between OSK and the TLC, OSK would rather hold on to short-term loans in the hopes that drivers will make their balloon payments.” …
Read the full piece Elias Schisgall in the New York Focus from September 3, 2024.
