Another scathing report regarding the National Credit Union Administration (NCUA’s) role in the taxi medallion debacle has been released – this time by none other than New York City’s own Mayor Bill de Blasio. Following the release of NCUA’s Inspector General Office’s Material Loss Review, the New York Times investigation and Federal Financial Analytics’ research report, NCUA may have assumed it had weathered the storm. But considering the magnitude of problems the agency caused with its recklessness, this is just the beginning.
Mayor de Blasio’s investigation confirmed similar findings as previous reports, but also revealed numbers that show just how badly these loans affected innocent drivers. According to the report, the average debt owed by drivers is about $500,000 – well above the current market value of medallions. Over a quarter of these cab drivers have declared bankruptcy or considered doing so.
Mayor de Blasio holds NCUA responsible for the current financial plights of these New Yorkers, claiming NCUA did nothing to help borrowers repay the faulty loans. When major taxi medallion credit unions like Melrose, LOMTO, Bay Ridge and Progressive failed, NCUA should have stepped in by modifying the loans for these taxi drivers. Instead, the agency allowed these credit unions to go down kicking, forcing the drivers to pay up in full for the institutions’ mistakes.
In response to the Mayor’s report, a spokesperson said that the NCUA is “committed to balancing the needs of these borrowers” but also struggles to do so with balancing “meeting the congressionally mandated requirement for NCUA to ensure the safety and soundness of credit unions and the National Credit Union Share Insurance Fund.” But anyone with a brain knows that the “safe and sound” thing to do would have been to stop these loans from going forward in the first place. This could have prevented the $765.5 million loss to the National Share Insurance Fund as well. It’s a little too late to act like the agency’s priorities are in line here.
We’re glad that elected officials like Mayor de Blasio and Senate Majority Leader Schumer are taking note of this major problem, and we hope other policymakers, within and outside of New York, will do the same. How many reports on NCUA’s risky behavior need to come out before real action is taken?