A fiery horse with the speed of light ...
Posted on 10/02/2019 8:39:34 AM PDT by Steely Tom
An impassioned statement by Representative Alexandria Ocasio-Cortez is drawing renewed attention on a push within the City Council to bail out New York City taxi drivers saddled with outstanding medallion loans.
At a congressional hearing last Thursday, Ocasio-Cortez, whose district in the Bronx and Queens is home to many immigrant cabbies, lashed out against the predatory lending practices that led thousands of drivers to borrow huge sums of money for overpriced medallions. She called directly for a bailout.
“These are everyday people, most of them immigrants in New York City trying to start to start their lives and live up to this country’s promise,” she said. Citing one cab driver who was able to take out a $1 million loan on a salary of roughly $22,000, she said, “We’re supposed to act as though this is his fault? This is criminal behavior."
“Regulatory agencies knew, the city knew,” she continued, adding that the spate of driver suicides, at least eight last year, “are not just an indirect side effect, they are a direct consequence of the neglect of a vulnerable community in New York City.”
She added: “This is manufactured financial indentured servitude.”
Below you can watch Ocasio-Cortez's entire presentation, starting at approximately 2:30.
A New York Times investigative series earlier this year revealed how the city and regulators were complicit in the sale of overpriced medallions, which skyrocketed to more than $1 million before crashing in 2014. Despite concerning signs, the city approved and profited off the sale of medallions, which give drivers the right to drive a taxi.
The hearing in Congress was intended to address legislation to protect individuals from abusive lending practices. Ocasio-Cortez said she and other elected officials sent a letter in August expressing concern over the role of federal regulators in the crisis.
On Monday, Council member Mark Levine, who has been leading the effort to draft legislation for a bailout, said the Congresswoman’s attention to the issue gives the effort “enormous momentum.”
Levine said his plan, which is undergoing legal vetting, would be to have the city buy outstanding loans and refinance them on fairer terms.
In June, Mayor Bill de Blasio agreed to waive $10 million in license renewal fees. But he has rejected the idea of a bailout, saying it would be too expensive for the city. His office has estimated the cost as being as much as $13 billion. On Monday, the mayor's office did not immediately respond to a request for comment.
But Levine said such a figure was exaggerated and maintained that a bailout could be accomplished for less than $1 million per driver, roughly the amount the city made in the sale of a single medallion during the bubble.
He said he was not sure when the legislation would be introduced but he said that although council members have questions about the cost and how the plan would work, there was a growing support behind a bailout.
“There’s a consensus that we owe an unpaid moral debt to the drivers that have suffered because of a crisis that we have helped create,” he said.
UPDATE: This story has been revised to clarify that Levine's estimate for a bailout was per driver and that the city made roughly $1 million for the sale of a single medallion during the height of the bubble.
Lib vs Lib. Lefty vs Lefty.
Isn’t she too late here? Didn’t Cohen already make a deal to get out from under that?
How many of them are here on over-stayed visas?
If the city knew, why are the rest of the States expected to fork over tax dollars for a bail out? NOT a federal issue.
A fiery horse with the speed of light ...
Wait..
So there IS a tax, fee and Strangling Gov Regulation that AOC does NOT like?
I’m shocked.
Capitalism wrecked the medallion racket. In this case sanity was brought to the market place in the form of Uber. Competition is always a very good thing. AOC harps on the immigrant participation in this government run robbery, but even an immigrant that can’t speak English should be able to do the math and know that the loans associated with the medallions were a bad deal There has to be a great deal of personal responsibility here regardless of what she says.
Did the value of the medallions crater due to Uber?
I would imagine. IIRC I remember reading that was how Cohen got burned with them.
I do feel badly for them. Someone likely lied to them about how much they'd make, etc,. and they figured it couldn't possibly be as bad as it sounded. But it was.
Of course, the remedy should come from the City of New York. Not from the State, and certainly not from the rest of us non-New Yorkers.
Yes, Uber, Lyft, etc. There was no competition as the city limited the number of medallions, artificially inflating the price prior to the ride-sharing companies. Now, with the ride-sharing companies not having to buy medallions, the price crumbled.
So these cabbies made some bad (and costly) business decisions.
$!M for a medallion? Sounds like they weren’t buying them for what they could earn in fares, but for future resale value.
Reminds me of the guy who invested in the last buggy whip factory in America because somebody had come up with a new and innovative way to make them for pennies on the dollars.
Thirteen billion?! For taxi medallions?! Someone - or someones - made a fortune here.
Whoever gave out the loan should eat it. Pretty simple.
Why do they even have medallions? Here in Wasilla, Alaska there are no medallions or permits constricting the number of cabs on the road and we seem to get by just fine. Let the market decide how many cabs there are to serve the community.
I think this is hog wash. In order to get a $1M loan, one has to have at least 40k at the end of the year to be able to pay it off. How in the world could someone making only $22k get such a big loan?
To make money. Basically medallions started as an extra tax. Then they became a transferable asset, which spawned a spec market. But the cities love those because they periodically decide they need more medallions, and guess how much the city sells them for, not some inflation adjusted version of the original price, that would undercut the market and be “wrong”. So cities that do medallions LOVE that spec market.
Hey FRiend, I need your help.
IIRC you used to be a Hack and therefore could correct any misstatements I make. I’ve been out of the Apple for almost 20 years now and I’m working from memory
At one time hadn’t the vast majority of medallions been held by a handful of fleet operators? The owner/operator cabs were few and far between. Wouldn’t a bail-out benefit these fleet operators greatly or did they start dumping their medallions to those who had been working (leasing by the shift) the cabs knowing fullwell ahead of time that the City was gonna change the laws to allow Uber, Lyft etc, causing the value to plummet?
Bankers, fleet owners, the in between brokers...all ####ed mostly new immigrants into thinking it was the opportunity of a lifetime and busted them out.
And I would guess that YES they saw the writing on the wall regarding uber etc.
That would throw some politicians into the mix who also ####ed the people who bought them.
Some have committed suicide.
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