Task force outlines options regarding taxi medallions in report released today

Fleet of Yellow New York City Taxi Cabs from Above

The Taxi Medallion Task Force released its long-awaited report today, offering recommendations that local, state and the federal government could take to handle the beleaguered medallion situation and improve the economic conditions facing taxi drivers in New York City.

Among its recommendations, the task force, of which New York Credit Union Association President/CEO William J. Mellin is a member, suggests banning the practice of confessions of judgment and increasing enforcement against illegal street hail pickups. Other options may require “more creativity and unflinching resolve,” including the proposal to establish a loan purchase and modification program for medallion owners struggling with unsustainable debt, the task force suggests.

“During our discussions it became abundantly clear that the medallion taxi industry in our city is in a state of crisis, and the time to take urgent, bold action to remedy the situation is now,” the report states.

The six-month efforts of the task force focused on how the current financial crisis among over-indebted medallion owners could be addressed, and how the medallion industry could remain viable in a changing marketplace.

The task force members agreed that urgent action is needed to assist medallion owners and drivers who are currently struggling with debt. In the report, they say it is imperative that “regulators, governments, the medallion industry, and private actors” work quickly to develop an option for medallion owner debt relief and take steps to stabilize and modernize medallion taxi service, “if it is to remain a competitive and viable transportation option into the future.”

The task force calls on regulators, including the Taxi and Limousine Commission, to meet regularly with taxi industry stakeholders, lending industry representatives, academics and advocates to continue the dialogue started in the report. Further, implementation of any of the task force’s recommendations in the report should be followed by a periodic assessment of the effectiveness of the proposals and adjustments to reflect changing circumstances and lessons learned, the report states.

The report also urges the medallion taxi service to adapt to the changing for-hire ride market, recommending that the Taxi and Limousine Commission review its rules regarding technology system requirements to allow for more streamlined integration of passenger- and driver-friendly software taximeters. It also calls for the creation of more innovation in the medallion taxi industry, including apps that riders can use to hail rides.

“The yellow taxi is an iconic New York City institution that has served as a ladder to the middle class for countless New Yorkers and a reliable mode of transportation for decades,” the report concludes. “With this report, the Task Force hopes to spark immediate action among policymakers and the private sector to address the burdens of medallion debt, and for it to serve as a foundation for ongoing conversations regarding the future of the medallion taxi industry in New York City.”

As previously reported, it has been rumored that the National Credit Union Administration was considering selling off its medallion portfolio in response to the ongoing medallion situation. A letter to NCUA from four credit union groups — including the New York Credit Union Association — urged the NCUA to refrain from selling its taxi medallion loan portfolio.

The Jan. 23 letter to NCUA Chairman Rodney Hood outlined why the four groups believe the sale of taxi medallions is a bad idea, and laid out actions the agency should instead take. The letter was signed by Mellin; CUNA President/CEO Jim Nussle; Illinois Credit Union League President/CEO Tom Kane; and CrossState Credit Union Association President/CEO Patrick Conway.

And last October, Mellin penned a letter to Hood expressing concerns about the long-term reputational damage to credit unions that could result from NCUA’s unwillingness to work with borrowers.

The task force report can be accessed here.

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