NY lawmakers demand action from NCUA on taxi medallion lending
Rep. Alexandria Ocasio-Cortez, D-N.Y., and 10 other New York lawmakers are seeking additional information from federal banking regulators on taxi medallion lending practices in New York City.
The lawmakers wrote a letter to the heads of the National Credit Union Association, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to “express our strong concerns about how regulators have exercised their supervision of federally-insured banks and credit unions” that provided loans to borrowers to buy taxi medallions.
“As you are aware, media reports have described how predatory business practices ruined the livelihoods of many taxi drivers in the region while generating large profits for financial institutions,” the letter said.
Credit unions and NCUA have faced criticism over taxi medallion lending since the New York Times did a series of stories on the sector earlier this year. Bankers have seized on the issue to argue that credit unions aren’t being scrutinized enough by NCUA and have pushed for Congress to investigate.
“The agency has received the letter and is reviewing it," according to NCUA spokesman John Fairbanks.
The July 25 letter to the banking regulators requested information on whether the agencies have tightened oversight into taxi medallion lending and about the regulator’s compliance with current investigations into the lending practices. General information about entities that provide taxi medallion loans was requested as well.
The extent to which the agencies have modified loans and repayment plans in addition to forbearances and loan forgiveness was also included in the letter’s requests.
The lawmakers’ letter highlighted the plight of Mohammad Hoque, who took out a $1.7 million loan to buy a taxi medallion. With an annual salary of $30,000, he struggled to repay the debt.
Because of the lack of disclosures, Hoque said he was initially unaware that the $50,000 he had already paid only covered taxes.
"What makes this all the more troubling is that regulators appeared to be aware of risky lending practices years earlier," the letter alleged.
The lawmakers gave the banking regulators until Aug. 30 to respond in writing.
The lawmakers who joined Ocasio-Cortez in signing the letter include Adriano Espaillat, Nydia Velázquez, Yvette Clarke, Jerrold Nadler, Carolyn Maloney, Thomas Suozzi, Gregory Meeks, José Serrano, Grace Meng and Hakeem Jeffries.