WASHINGTON, DC – Today, Rep. Ritchie Torres (NY-15) is joined by Senate Majority Leader Chuck Schumer and ten New York House Democrats in signing a letter urging Mayor DeBlasio 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. We urge you to take this opportunity to preserve that pathway for thousands of New Yorkers,” wrote the New York lawmakers in their letter to Mayor de Blasio.
“The collapse of the medallion market is one of the greatest government failures in the history of our city. The city government was complacent as a regulator and complicit as speculators,” said Rep. Torres. “New York City taxi drivers are saddled with unimaginable debt due to the devaluation of medallions. New York City must provide a real solution, including a city-backed guarantee on medallion debt, so borrowers can be unburdened by excessively high monthly payments. It is time for the city to deliver relief to drivers facing paralyzing debt and robbed of their retirements.”
“New York’s hard-working taxi drivers have been drowning in debt for years due to overinflated medallion prices, unregulated competition, and exploitative loans. New York City has appropriately used a portion of the federal local aid I secured in the American Rescue Plan to establish a Taxi Medallion Owner Relief Program, but more must be done to fully refinance the overwhelming debt from overinflated medallion prices, including a backstop that would supplement the effectiveness of current programs and facilitate more cost-effective relief to the thousands of owner-drivers,” said U.S Senator Charles Schumer.
“Drivers devastated by the crisis of crushing medallion debt have waited long enough for a resolution. We do not want a band-aid, a half-fixer, a bridge to bankruptcy. Drivers want their lives back, unshackled by a debt beyond their life-time and free from poverty. Our Congress Members delivered on the promise to keep our city and state – the epicenter of the pandemic – whole through vital aid. Now it’s time for the Mayor to deliver to drivers. Our proposal for a city-backed guarantee will transform the TLC’s grant program into an actual debt relief plan. It has been vetted and has popular support. Today is Day 17, past 390 hours of non-stop protest outside City Hall. In the midst of the biggest budget debate in the nation’s capital in half a century, our Congress Members heard the voices of drivers and are standing for our survival and our justice. Mr. Mayor, let’s go,” said Bhairavi Desai, Executive Director of 25,000-member strong New York Taxi Workers Alliance.