Medallion Debt Forgiveness Campaign!
DEMANDS
We are calling on lenders to restructure loans to $125,000 - forgiving all other debt - and refinance at no more than $900/month. (Refinancing $125,000 at 4% over 20 years would be $757.48 monthly mortgage.)
We are calling on the City to use its power and resources to support our survival. If, after debt restructuring, the medallion is foreclosed due to non-payment by the borrower and auctioned for sale in a public auction, the city agrees to place a minimum bid equal to the balance of the loan at the time of foreclosure times 105%. (For example, if $80K remains at time of foreclosure, the City bids $84K) If the medallion is bought by a private party, the city loses nothing. The City would play this "backstop" role only for loans that are restructured to $125,000 and done so within 30 days after the city passes a law to play this role.
We also call on Congress to set up 0% interest loans and pass Congressman Gregory Meeks' bill (House bill 5617) for tax exemption on medallion debt forgiveness as part of the next stimulus package.
We recommit our demand to return foreclosed medallions in storage to the original owner at the same proposed terms.
We call on the NYS Attorney General in her lawsuit against the City of New York over its role in fraudulently inflating the value of the medallion to fight for $150,000 restitution for medallion owners over 62 years of age whose retirement was stolen when the market crashed due to city's role in predatory lending and failure to regulate App companies.
TAKE ACTION!!!
*Fill out the Medallion Owner-Driver Intake!*
*Zoom Meeting Every Friday at 7pm til Victory!*
Join Zoom Meeting
Click here https://us02web.zoom.us/j/86238573371
Meeting ID: 862 3857 3371
DEBTORS’ PRISON + POVERTY
Even before COVID, yellow cab owner-drivers were drowning in life-long debt and daily poverty wages. Taxi revenue was down 36% since 2011 to 2019, or 44% when adjusted for inflation. As vehicle expenses go up annually, owner-drivers have seen a pay cut as steep as 50%. Imagine earning half of what you did eight years ago. There were more medallion bankruptcies in January 2019 than all of 2015, 2016 and 2017. Owner-drivers are carrying an average debt of $600,000 on the medallion while in arrears $25,000 a year on cost of living. That’s $25,000 worth of rent/house mortgage, gas and electricity, food, medicine, healthcare that 6,000 families in this industry are being forced to live without.
There are an estimated 5,630 individual medallions. 4,580 medallions were on the streets pre-COVID, with the rest “in storage” with the Taxi and Limousine Commission due to bankruptcy, foreclosure, or other financial hardship. 2,348 of the individual medallions are driven by the owner; and about 1,200 owner-drivers working today are 62 years and older.
Men and women in their sixties and seventies working because the monthly payment they used to get from renting out the medallion to a taxi broker can’t pay the mortgage anymore, let alone allow for retirement. One such member of ours drove for less than a year before he had a massive heart attack. The stories of owner-driver hardships abound: heart attacks, strokes, depression, working round the clock, foreclosures, bankruptcies, evictions. Suicide. Three of the nine drivers known to have committed suicide over the past year and a half were owner-drivers. 33% representation for a segment of the workforce that is less than two percent of the driver population.
Predatory Lending
A New York Times investigation found medallion values were inflated so lenders – many of them involved in predatory loans in the 2008 housing crash – and middlemen called brokers could make extra profits off the drivers’ backs. Banks made money in 2017 and 2018 when owner-drivers were struggling with payments by using practice called confession of judgment, which was banned by Congress in consumer loans but not in business loans, which is how lenders classified taxi medallion loans; it is also banned by some states even in business loans, but is allowed in business loans in NYS. Borrowers sign papers saying the lender can get paid total loan once balloon ends.
Government Complicity
The New York Times further reported that seven government agencies knew about the scandal and did nothing. In total, New York City made $850 Million from 16 medallion auctions 2004 – 2014.
The spike in medallion value started in 2004. The City advertised medallion prices on average 13 percent higher than they really were. TLC staff wrote a report in 2010 that the value was inflated; but the Bloomberg Administration ignored it and the auctions continued. Also in 2010, the NYS Department of Financial Services wrote warnings of inflated values and issued at least one report that the bubble would burst. In 2011, NCUA wrote a paper on the risks of the industry; in 2012, 2013, and 2014 they had reports of credit unions violating lending rules. NCUA never penalized or added oversight. In 2014, the state’s DFS called a meeting of a dozen top officials. All the while, the auctions continued. In 2014, the city set the opening bid at $850,000. But it doesn’t end there. The same City, in fact some of the actual same city officials, during those same years, went from directly overseeing the auction of overvalued medallions to unleashing Wall Street-backed corporate competitors with virtually no regulations or barriers to entry and limitless cash. They then went to work for those companies.
Uneven Playing Field
Practically the only regulation in place that attempts to treat the hyper-regulated medallion yellow cab industry and Uber, Lyft, and Via the same is a vehicle cap on the companies instituted after they had collectively reached 85,000 cars, compared to less than 12,000 operational yellow cabs. There are differences in vehicle retirement requirements, inspections, taxes and fees. At the airports, taxi lines outside of terminals are being erased. App-dispatched cars are allowed to drive up to terminals while street-hailing yellow cab passengers are shuttled over. After a rare joint lobbying effort by Wall Street’s companies, New York State passed a congestion surcharge where yellow cabs charge $2.50 to passengers in the zone where over 90% of their trips occur, and the App companies get to charge $0.75 as long as the passenger requests a group ride.
Between predatory loan terms, an inflated asset, and an uneven playing field, owner-drivers are imprisoned by debt and poverty. The path forward is our campaign demands.