Meng, Joined by Members of NYC Congressional Delegation, Seek to Help Borrowers Who Used Queens-Based Melrose Credit Union to Finance Purchase of New York City Taxi Medallions
Oct 12, 2017
U.S. Reps. send letter to National Credit Union Administration
WASHINGTON, D.C. – U.S. Rep. Grace Meng (D-Queens), joined by seven other Members of the New York City Congressional Delegation, today sent a letter to the National Credit Union Administration (NCUA) calling on the agency to work with borrowers who used Queens-based Melrose Credit Union to finance the purchase of New York City taxi medallions.
In February, NCUA assumed control of Melrose – whose loan portfolio is more than 90 percent comprised of medallion-backed loans – after the New York State Department of Financial Services found “unsafe and unsound conditions” at the credit union. Many loans have been required to be rapidly repaid in full, reportedly resulting in the bankruptcy of 35 borrowers so far.
“Cab drivers and medallion owners have been suffering terribly from the decline in medallion values and now some who borrowed from Melrose are being met with unfair repayment demands,” said Rep. Meng. “This burden is turning the lives of hard working taxi drivers upside down, threatening their livelihood and forcing many into bankruptcy. It is also threatening the survival of New York’s taxi industry. NCUA must do what it can to stop the bleeding. The agency should seek to protect medallion owners as much as it possibly can. Borrowers, through no fault of their own, have hit hard times due to a changing industry; they need help. I eagerly await the agency’s response to our letter.”
Melrose Credit Union was established in 1922 and is presently located at 139-30 Queens Boulevard in Briarwood, Queens. NCUA is an independent federal agency that was created by Congress to oversee federal credit unions. It also insures deposits of account holders in federal credit unions and most state-chartered credit unions.
Other New York City Reps. who signed the letter include House Democratic Caucus Chairman Joe Crowley (D-Queens/Bronx), Adriano Espaillat (D-Manhattan/Bronx), Hakeem Jeffries (D-Brooklyn/Queens), Carolyn Maloney (D-Manhattan/Queens/Brooklyn), Gregory Meeks (D-Queens/Nassau), José Serrano (D-Bronx) and Nydia Velázquez (Brooklyn/Manhattan/Queens).
A copy of the letter can be viewed here.
“Hard-working men and women saw their investment in a taxi cab medallion as their way to achieve the American Dream,” saidRep. Crowley. “They worked hard, played by the rules, and hoped to create a better future for themselves and their families. It is imperative that the National Credit Union Administration help these men and women who now find themselves struggling with financial insecurity through no fault of their own.”
“New York cab drivers are some of the hardest working drivers in the nation, entrusted with the duty of getting riders to their destination safely and swiftly,” said Rep. Espaillat. “They paid a premium to operate their yellow cab service throughout the city, and at no fault of their own, the value of their medallions has plummeted while leaving many vulnerable and unable to pay the now exorbitant fee due to market conditions. It is critical that we work to find solutions for the challenges New York cab drivers face and allow greater flexibility to ensure continued operation of their cabs as well as the ability for them to repay their loans.”
“Despite recent changes in the industry, New York taxi drivers are an iconic part of our city,” said Rep. Jeffries. “It is our responsibility as community leaders to ensure they can reasonably and fairly pay back their medallion loans. All hardworking Americans deserve the respect to earn their own living, and these cab drivers are simply asking for that opportunity. I look forward to working with my New York City Congressional colleagues and the NCUA to help protect the hallmark of New York in these changing times.”
“I’m pleased to join Rep. Meng and other members of the New York delegation on this effort to support New York’s taxi drivers and medallion owners,” said Rep. Maloney. “This is an incredibly challenging time for the taxi industry and I hope the NCUA does all it can to ensure that medallion owners who used Melrose Credit Union to finance their medallions are not saddled with crushing repayment conditions that could put them out of business.”
“Yellow cabs have long been a New York City institution, and purchasing a medallion a way to achieve the American Dream,” said Rep. Meeks. “The taxi drivers who chose to invest in these medallions—and the institutions that financed them—did so with certainty that transporting fellow New Yorkers would be a stable, sustainable source of income. These drivers have since been thrust into debt and uncertainty, through no fault of their own. The NCUA has a responsibility to provide what relief it can to these borrowers, and I look forward to receiving a response from the agency.”
“Taxi medallions’ decline in value has affected the ability of taxi drivers to pay back loans for the medallions, impacting their earning capacity and forcing many into bankruptcy,” said Rep. Serrano. “The NCUA, since taking over the Melrose Credit Union, had been requiring rapid repayment of these loans without consideration of these underlying issues. The agency should take this situation into consideration and find a way to work out an arrangement with borrowers who are unable to repay their loans under this unreasonable timetable.”
“Hardworking New Yorkers, many of them immigrants, who drive cabs for a living are facing significant hardship, due to industry changes and the decline in the value of taxi medallions,” said Rep. Velázquez. “Rather than making the situation worse, we’re asking the industry regulator who is in conservatorship of these loans to work with drivers and help them find a workable solution for their debt.”