11 NYC members of Congress call for increased oversight of medallion lenders

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Eleven U.S. House members from New York City and Long Island wrote a letter to four federal financial regulators calling for tougher oversight of lending in the taxi medallion industry.

The letter was addressed to NCUA Chairman Rodney Hood, Federal Reserve Chairman Jerome Powell, Comptroller of the Currency Joseph Otting and FDIC Chairwoman Jelena McWilliams.

In the letter, the lawmakers asked for information about entities involved in providing taxi medallion loans, and whether or not the agencies have toughened up oversight of the industry and are cooperating with any law enforcement investigations into lending practices.

“Collectively your agencies have the important responsibility to ensure that banks and credit unions are operating in a safe and sound manner and are not engaging in, or otherwise aiding and abetting in, predatory schemes when making loans to individuals, like these taxi drivers,” the lawmakers wrote. “Proper oversight is especially important given that many of the taxi drivers are new to these types of complex financial and legal agreements. Therefore, it is important Congress learn what steps, if any, you have taken to date to improve supervision of entities you regulate that operate in the taxi medallion industry, as well as to ensure that affected taxi drivers who received predatory loans are remediated.”

The lawmakers noted an example of a taxi driver, Mohammad Hoque, an immigrant who emptied his savings to buy a taxi medallion.

“Mr. Hoque, who made $30,000 annually, signed a contract for approximately $1 million that eventually would require him to owe the unbelievable amount of $1.7 million due to fees and interest,” the letter stated. “Due to the lack of clear disclosures, Mr. Hoque said he was unaware until much later than the $50,000 he paid upfront was only for taxes.”

Additionally, the lawmakers listed five questions for the regulators that they would like answers to by August 30, including “to what extent entities regulated were involved, directly or indirectly, in providing taxi medallion loans, including whether any of these entities coordinated with fleet owners and brokers to provide these loans.”

The letter was signed by Reps. Alexandria Ocasio-Cortez (D-14), Adriano Espaillat (D-13), Nydia Velázquez (D-7), Yvette Clarke (D-9), Jerrold Nadler (D-10), Carolyn Maloney (D-12), Thomas Suozzi (D-3), Gregory Meeks (D-5), José Serrano (D-15), Grace Meng (D-6) and Hakeem Jeffries (D-8).

The letter is embedded below:

 

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