City recommends tighter regulations for medallion lenders

In the continuing aftermath of The New York Times’ May investigation into predatory and reckless taxi medallion loans in New York City, taxi industry leaders – specifically, the brokers who facilitate such deals – are taking much of the heat for leaving owner-drivers in crippling debt. A 45-day-review conducted by the New York City Taxi and Limousine Commission, the city Department of Consumer and Worker Protection, and the city Department of Finance determined that the brokers often failed to provide adequate information to cabbies about the medallion transactions.

Industry leaders continue to blame the economic decline of taxi drivers on the rise of ride-hailing apps like Uber and Lyft – an argument that was mostly agreed upon before the Times’ reporting. Monday’s review does make mention of “increased competition for passengers” as a cause of taxi drivers’ financial burdens. Still, the findings of the joint inquiry show that brokers were caught in conflicts of interest and often violated city rules. 

While the review made several recommendations for reform – including new regulations requiring brokers to disclose more information about the loans, and to translate documents into the city’s top 10 non-English languages – the big question is whether a city bailout will be approved to ease some of the drivers’ more immediate troubles. So far, City Hall has pushed back against a full bailout as too expensive, frustrating some city Council members who support at least a partial bailout.

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