'How can I survive?': Cabbies slam NCUA's medallion loan sale
More than 60 cabdrivers affiliated with the New York Taxi Workers Alliance traveled to Alexandria, Va., Thursday to lobby the National Credit Union Administration against selling more than 4,000 taxi medallion loans from two failed credit unions.
They arrived a day late.
The NCUA announced Wednesday evening that it had agreed to sell the portfolio to Marblegate Asset Management, an investment firm in Greenwich, Conn., for a reported $350 million.
The purchase price amounts to about $77,000 per medallion, according to the taxi workers alliance. Many of the drivers who attended Thursday’s regular monthly meeting of the NCUA’s board said they still owe hundreds of thousands of dollars on their loans.
Drivers are concerned Marblegate will seek to maximize its position by working to collect as much as possible from them, even though their earning capacity has been severely impacted by the rise of mobile ride-hailing companies such as Uber and Lyft.
“We have the worst jobs in the world,” driver Jana Stroe said after Thursday’s meeting. “We’re suffering. I drive 14 hours a day and most days I come home with $50.”
Stroe said she owes $500,000 for the medallion she purchased in 2012 with her late husband. To keep up with her payments, Stroe said she drives seven days a week.
“I’m 65 years old,” Stroe said. “How am I going to pay this?”
Driver Richard Chow said he also drives seven days a week in an effort to keep abreast of the payments on his $400,000 medallion mortgage.
“We’re suffering so much,” Chow said. “We can’t even pay our bills on time. How can I survive if they don’t help us?”
Chow’s brother, Yu Mein “Kenny” Chow, committed suicide in May 2018, apparently in despair over $700,000 in medallion debt he owed — a fact several drivers mentioned Thursday.
The NCUA was left holding the medallions after a number of credit unions became heavily concentrated in this area before running into trouble. Several institutions, such as Melrose and LOMTO credit unions, both based in New York, eventually failed.
Medallion-related failures have cost the National Credit Union Share Insurance Fund about $760 million, according to the NCUA.
“We’ve been working to dispose of the assets with the least long-term cost to the” share insurance fund, board member J. Mark McWatters said Thursday.
The NCUA sent senior members of its staff to New York to meet with both the City Council and the taxi workers alliance but couldn’t come to terms on a solution to aid distressed drivers, McWatters said. At the same time, the regulator risked losing the deal it had worked out with Marblegate.
“We had a deal where if we delayed we could lose it,” McWatters said.
The NCUA will work to ensure Marblegate “continues to work with you in good faith,” NCUA Chairman Rodney Hood said, but his assurance fell flat against the news the agency had agreed to a sale most drivers wanted desperately to avoid.
Earlier this month, a group of New York City taxi drivers met with NCUA officials to talk about the impact of the loan affordability crisis. NCUA staffers were also briefed on the recommendations of a New York City task force that was formed in response to the debt crisis that has ensnared many taxi drivers.
Under that plan, private investors backed by the city would purchase distressed loans at a discount and then reduce the borrowers’ payments to more affordable levels. The plan would require the voluntary participation of existing creditors.
The taxi workers alliance has been pushing for a relief plan that would forgive each individual borrower’s debt above $150,000 and would reduce their monthly payments to $900 per month. Before Wednesday’s announcement, the group was hoping to persuade the NCUA not to sell its loan portfolio before the nascent debt-buying plan in New York City gets up and running.
Taxi drivers left their Feb. 4 meeting with NCUA officials in an upbeat mood, but on Thursday they were downbeat.
Stroe said she was told buying a medallion would make her "an ambassador for the city."
Augustus Tang, who owes $480,000 for his medallion, said Thursday that he has little hope Marblegate “will look out for our well-being. At least with NCUA, we had a chance.”
Other NCUA news
In other business Thursday, the board approved a proposed regulation intended to update and simplify rules governing corporate credit unions. The NCUA will accept comments on the proposed rule for 60 days after its publication in the Federal Register.
Board members said also that they expect to consider a rule allowing credit unions to phase in the day-one impact of the Current Expected Credit Losses accounting standard over three years, similar to a regulation banking regulators adopted in November 2018.
Credit unions aren't scheduled to convert to the CECL accounting standard until 2023.
Kevin Wack contributed to this article.