Firm That Bought NCUA Taxi Loans Cuts Deal with Drivers

The private equity firm that purchased taxi medallion loans from the National Credit Union Administration has agreed to restructure loans for debt-laden cab drivers in exchange for a loan guarantee from the City of New York.

“Today’s agreement is a win for taxis, which are a critical piece of New York City infrastructure,” said Andrew Milgram, managing partner and chief investment officer of Marblegate Asset Management.

Marblegate had purchased an unknown number of taxi medallion loans from the NCUA. The agency was left holding the loans as a result of the failure of Melrose Credit Union and LOMTO Federal Credit Union. The credit unions made thousands of loans to taxi drivers with medallions as collateral; with the rise of ride-sharing services, the city’s taxi business plunged.

The NCUA’s sale of the loans to Marblegate was cloaked in secrecy. The agency has refused to disclose the number of loans sold and the terms of the loans.

The agreement between city officials, Marblegate and the taxi drivers follows a high-profile campaign by the New York Taxi Workers Alliance whose members argued that an assistance program announced by the city earlier this year was inadequate.

That campaign included a recent hunger strike by many drivers.

Under the agreement, Marblegate will restructure loans so that there is a $200,000 balance to each loan. That includes a $170,000 loan and a city grant of $30,000. The new loans will carry a 5% interest rate and payments will be capped at $1,222 per month. The city will provide funding for a guarantee on the principal and interest for these loans.

The city had announced a $65 million Medallion Relief Program, which the taxi drivers had denounced as inadequate, in part because it did not include a city guarantee for each loan.

“Today, we can say owner-drivers have won real debt relief and can begin to get their lives back” Bhairavi Desai, executive director of New York Taxi Workers Alliance said. “Drivers will no longer be at risk of losing their homes, and no longer be held captive to a debt beyond their lifetime.

Senate Majority Leader Charles Schumer, D-N.Y., helped broker the deal.

“The medallion debt crisis has gone on for years, taking lives and livelihoods,” Schumer said.

Related:

NYC Dems: City Plan to Help Debt-Laden Taxi Drivers is Insufficient

Taxi Workers Alliance Pleads with Marblegate to Negotiate Over NCUA Loans

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