U.S. Rep. Ritchie Torres, Senate Majority Leader Chuck Schumer and 10 New York House Democrats signed a letter last week urging Mayor Bill de Blasio to add a city-backed guarantee to the taxi medallion relief program.
The letter calls for the addition of a guarantee to the existing grant program to transform it into meaningful debt relief and ensures that drivers have sustainable monthly mortgage payments that allow them to take home a living wage.
The proposal, which was devised by the New York Taxi Workers Alliance, would guarantee medallions are restructured to a principal amount of no more than $145,000, and $800 monthly payments. This backstop would give lenders assurance that the loan is guaranteed while allowing borrowers protection against home foreclosures.
The current program provides drivers a $20,000 grant that they can use towards restructuring their medallion loans. These funds provide lenders an incentive to restructure medallion loans, but the proposed rule currently allows for monthly loan payments that drivers cannot afford to pay. The program fails to restructure medallion loans to realign them with the market value of the medallion.
A series of investigations by The New York Times exposed predatory lending practices and regulatory failures that led to this crisis. From 2004 to 2014, the city earned $850 million from medallion sales and fees. The city set the opening bid for a medallion at $850,000 in 2013, that value has since plummeted. Individual medallion owner-drivers, a largely immigrant workforce, have suffered immense financial distress, resulting in three drivers taking their own lives. Thousands of New York drivers face the prospect of bankruptcy and are unable to earn a living wage while continuing to repay their loans at current rates.
“The taxi industry remains a vital — and iconic — part of the transportation infrastructure of our city that is relied on by millions of New Yorkers. Driving a yellow taxi and acquiring a medallion has been a path into the middle class for generations of immigrant New Yorkers and their families,” wrote the New York lawmakers in their letter to de Blasio. “We urge you to take this opportunity to preserve that pathway for thousands of New Yorkers.”