By Michael V. Cusenza
Eight members of the city Congressional delegation on Thursday sent a letter to the National Credit Union Administration calling on the independent federal agency to work with borrowers who used beleaguered Briarwood-based Melrose Credit Union to finance the purchase of NYC taxi medallions.
U.S. Rep. Grace Meng (D-Flushing) noted that the NCUA, which was created by Congress to oversee federal credit unions, assumed control of Melrose in February after the State Department of Financial Services found “unsafe and unsound conditions” at the credit union. Melrose’s loan portfolio is more than 90 percent comprised of medallion-backed loans. According to Meng, 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,” Meng said. “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 the New York 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.”
The other members of the city Congressional delegation that signed the letter are: U.S. Reps. Joe Crowley (D-Queens and Bronx), Adriano Espaillat (D-Manhattan and Bronx), Hakeem Jeffries (D-Howard Beach and Brooklyn), Carolyn Maloney (D-Manhattan, Queens, and Brooklyn), Gregory Meeks (D-Queens and Nassau), José Serrano (D-Bronx) and Nydia Velázquez (D-Brooklyn, Manhattan, and Queens).
In their missive, the pols noted that, while placing Melrose in conservatorship “may have been a necessary action for the NCUA to take, we ask that you recognize the unique income-generating nature of the underlying asset – taxi medallions – and examine the ways in which other lenders have addressed the holding of medallion-backed loans within their portfolios.”
Jeffries added, “It is our responsibility as community leaders to ensure [taxi drivers] 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.”
