On March 3, dozens of medallion owners protested in front of the Midtown offices of Vedder Price, a law firm that has been sending out repossession notices on behalf of a Minnesota-based lender named O’Brien-Staley Partners (OSP), a private-equity firm holding 10% of  NYC’s taxi medallions. Alleging harassment, the cabbies – who have been walloped by taxi-medallion debt – pushed for the firm to halt sending out repo men looking to foreclose on their once-prized assets. They banged on drums and chanted, “We want action! We want justice!”

In mid-March, 70 New York state elected officials followed up with a letter blasting OSP, which holds roughly 400 medallion loans, making it a central player in the debt resolution process. They accused the company of engaging in “abusive and predatory taxi medallion seizures and foreclosures.”

The accusation came right before the city’s Taxi & Limousine Commission (TLC) was set to vote on rules inaugurating the plan brokered by the de Blasio administration and private lenders holding taxi medallion debt to resolve the crisis.

“The City of New York, in close collaboration with lenders and drivers, has made a commitment to resolve this crisis by offering to guarantee medallion loans. We are calling on OSP to be part of the solution,” the letter states. “Rather than fully participate in the viable and fair guarantee program, OSP has continued to prey on immigrant cab drivers.”

The open letter from New York’s political delegation – including Democrats in the state Senate and Assembly, City Council and Congress – accuses the lender of hiring debt collectors to harass drivers for outstanding payments, including one collector who was arrested and charged with impersonating a New York marshal. The letter states that OSP’s debt collectors have accosted drivers at JFK Airport and their homes and have removed medallions and license plates from cabs in the middle of the night.

“It’s pure harassment,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “Their repo man is chasing drivers from Manhattan through Queens, sometimes in the middle of the night across highways, all for some cash before the city’s program starts. It’s a complete shakedown.”

Assemblyman Zohran Mamdani of Queens, who signed the letter and partook in a recent hunger strike with indebted taxi drivers, called OSP’s tactics disgraceful, adding: “They’re seeking to take advantage of their last window of opportunity to extract maximum profit from the most vulnerable people.”

The TLC, on March 16, voted unanimously to authorize the program to provide critical debt relief for overburdened taxi medallion owner-drivers. Under the program, the City says it will “supplement the existing Medallion Relief Program (MRP) with a City-funded deficiency guaranty to achieve greater principal reduction and lower monthly payments for debt-burdened owner-drivers, helping to promote the recovery of the yellow taxi industry and the City’s economy.”

The approved rule allows medallion lenders to move forward with agreements that include the supplemental loan deficiency guaranty. Under the program, the City will fund a third-party guaranty on medallion loans written down to a principal balance of no more than $170,000, with an interest rate of 5% or less, and fully amortized over 20 years.

“We are finally turning the tide on the taxi medallion debt crisis,” said acting TLC Commissioner Ryan Wanttaja. “The City-funded guaranty is an incredibly powerful tool for supporting struggling owner-drivers, helping them pay off their loans and still put food on the table. New Yorkers are counting on yellow taxis, and I can say with confidence that yellow taxis are here to stay.”

Members of New York’s Legislature and congressional delegation said they were at a loss as to why OSP decided to seize medallions right before the city’s relief program went into effect. Multiple lenders – most notably Marblegate Asset Management, the single largest holder of city medallion loans – have either formally or informally signed onto the relief program, making OSP’s alleged repossession tactics an outlier in a stable truce between drivers and their creditors.

The TLC vote on the plan was temporarily postponed after Aloysee Heredia Jarmoszuk, the chair and commissioner, resigned abruptly in the wake of a New York Post story detailing a lawsuit accusing her of fostering a hostile work environment at the agency and berating employees.

“I will f–king come for you,” Jarmoszuk reportedly said during a virtual staffing meeting.

In an email to the media outlet, THE CITY, the former commissioner said she was “proud to lead an agency full of dedicated employees who want to effect positive change – both within the agency and on the industry. I pushed my team as hard as I pushed myself and I will be the first to admit that I should have found a more constructive way to express my expectations to them during the video call. I was wrong and I am sorry.”

THE CITY reported in February that more than 250 taxi medallions were foreclosed on in the months since City Hall agreed to cap medallion debts at $170,000 after an initial $65 million medallion owner relief program. TLC data shows there were 6,653 yellow taxis on the road in January – just 49% of the 13,587 medallioned vehicles.

A spokesperson for Mayor Eric Adams said the TLC is encouraging all lenders to participate in the relief program to the degree that they have borrowers in need.

 

Sources: Crain’s New York Business, The City