The private equity fund that purchased New York City taxi medallion loans from the National Credit Union Administration is so far unwilling to negotiate reasonable settlements with drivers who are unable to repay the money they borrowed from credit unions and banks, Bhairavi Desai, executive director of the New York Taxi Workers Alliance said Wednesday.
On Wednesday, more than 150 New York City taxi drivers drove to Greenwich, Conn. to protest outside the headquarters of Marblegate Asset Management, the private equity fund that purchased loans from the NCUA.
“We took our plight public because things are otherwise going nowhere,” Desai told the Washington Credit Union Daily. “We want a collective solution and one that responds to the market reality.”
The NCUA took control of the loans, after two credit unions, Melrose and LOMTO Federal credit unions failed, in large part because they loaned money to taxi drivers to purchase their taxi medallions. As ride-sharing services such as Uber grew in popularity, the value of those medallions plunged, and drivers were unable to repay their loans.
The NCUA has repeatedly refused to disclose the details of the Marblegate sale, including the number of loans it sold and the amount the agency received in the sale.
NCUA officials have said they chose Marblegate because they were confident the company would negotiate with drivers. In recent months, the private equity fund has granted the drivers monthly “holidays” during which drivers were not required to make payments on their loans. The company cited the drop in taxi riders as a result of the coronavirus crisis.
However, Desai said that Marblegate is asking taxi drivers to settle with the company by agreeing to repay $300,000, with significant money up front.
“I just don’t know what it’s going to take for these businesses to understand that by pushing people beyond their capacity, they are destroying their borrowers’ health and jeopardizing their lives,” she said.
A Marblegate spokesperson said that the private equity fund is working with hundreds of borrowers on a case-by-case basis to lower monthly payments. The company has agreements in place to resolve more than $190 million in debt on more than 300 loans, the spokesperson said.
“We are constantly and actively working to restructure loans because we believe it is the best approach to stabilize the industry, bolster drivers’ long-term economic prospects, and return value to our investors,” he added.
Marblegate officials have met with Desai several times “about our shared goal of refocusing the entire industry on better serving long-neglected taxi drivers and our strategy to professionalize it in this and other ways,” according to the spokesperson
Desai said that the taxi workers alliance has written Marblegate officials an open letter and has presented a proposal that she said would allow taxi drivers to repay their loans.
The alliance is proposing that drivers be permitted to pay no more than $125,000 over 20 years, with a monthly payment of $757. She said the average NCUA loan was about $450,000, but that some loans sold for an average of $72,000. The city would serve as a “backstop” for the loan in case of foreclosure, purchasing it if no one else bids on it.
Some city officials have proposed a similar plan and the taxi workers alliance is asking Marblegate to publicly endorse it.
In the letter to Marblegate managing partner Andrew Milgram, the taxi workers alliance asks that the repayment “holiday” be extended until at least October. They ask that all foreclosures also be suspended.
“Without restructuring and lower monthly mortgages, our members will never make it, your own losses will not bottom out, and this industry will collapse,” they said, in the letter. “Work with us to bring stability to the industry.”
This story has been updated with comments from Marblegate.