The following is the first chapter of a series of non-fiction pieces I’ve been working on. Some names have been changed to protect the innocent, while others are not so innocent.
It was a day like any other, only more so, to borrow a phrase from the film “Casablanca.” Only a few months earlier, the long, gray winter was in full throttle with multiple snowstorms and little in the way of sunshine. Now, the sun was brightening and warming with increasing intensity. The New York winter was behind us, and I looked forward to barbecues, softball, golf, and a summer vacation.
On the other side of the ledger, I was stuck in my usual weekday locale, as Senior Loan Officer in a credit union, primarily focused on generating loans to New York City taxi medallion owners. The title was bestowed upon me, not because of my age or supervisory status, but simply as a reward for generating new business to the credit union.
My cubicle, though small, had the added disadvantage of lacking privacy, situated in a large lobby where members made payments, other employees opened accounts, and noise was continually at the level of a dull roar.
On occasion, transactions on these medallions could amount to millions of dollars. Privacy was important, but space considerations wouldn’t allow for it.
And then the phone interrupted my daydreaming, as I routinely went about the business of readying cookie cutter loans for approval from the higher authorities. Thankfully, it was only the receptionist informing me that a credit union member needed to speak with a loan officer. My availability qualified me for this duty. I informed the receptionist that I would be right out to see the member.
Of course, in the service industry, “right out” could mean anywhere from immediately to 20 minutes. My immediate supervisor frequently said that “in any good restaurant, there’s a 20-minute wait.” I, on the other hand, do not like to be kept waiting, in a doctor’s office or in a good restaurant – and in fact, I drive my family crazy by always being early to appointments.
In this case, I was in fact “right out” in three minutes, as there was little to interrupt me.
I located the fellow who needed a loan officer and led him to my cubicle. He was not any more unusual in appearance from my other borrowers, or potential borrowers. Yes, he had a full, dark beard, quite lengthy down to his mid-chest area, maybe a little bushier, and fuller than many of my other South Asian clients who had come to predominate the NYC taxi business in the 1990s. But he had a distinct lack of accent associated with the Indians, Bengalis or Pakistanis who many times used malapropisms wedded with their accents, begetting side-splitting responses to my queries.
Unfortunately for this fellow, he was involved in a financial squeeze. Conditions in the NYC taxi industry in the last few years of the Mayor Rudolph Giuliani administration had deteriorated substantially, hurting all segments of our industry. The suspension of drivers, harassment of drivers, and onerous rules made life miserable for the men and women who are the backbone of our little subculture.
The driver of the taxi was the crucial element that allowed every other segment to operate smoothly and profitably. The insurance companies, and their brokers, leasing managers who paid owners of the medallions a monthly income for managing their leased medallion, repair shops who provided the continuity for the vehicle operation, the lenders who required new blood in the business in order to grow their portfolios – all these segments were suffering as a result of Giuliani’s intention to seemingly destroy the taxi industry as it existed.
Industry paranoia ran rampant. Rumors that a takeover of the taxi industry by Disney started to make the rounds.
The medallion is a license issued by the city of New York to operate a taxi, pick up fares by street hail, and airport dispatch. It has been bought and sold by individuals on the secondary market to the effect that it had been a reliable investment for an owner-operator, and passive investors. Lately, though, a depression had encompassed the entirety of the business. So many drivers had fled the business of driving taxis that 15% of all medallions were not operating, and many of those were in storage with the city, with little hope of returning to operating capacity.
The leasing companies who were the middle-men between medallion owners and drivers were reducing their monthly payment to owners from $1,600 per month to $1,100 per month in general… and sometimes less. Owners who depended on that income for living expenses suffered. Borrowers who tied their loans to the lease income now had to dig into their pockets to cover the shortfall. The inevitable result was downward pressure on medallion prices. This put medallion lenders in jeopardy, especially if their loans exceeded current values.
But for this fellow in my cubicle, with his full, lengthy, bushy beard, the selling price was not of great import other than his ability to collateralize his medallions in exchange for loans. In fact, as I perused his account, I detected his propensity for cashing out his equity on three or four occasions to an aggregate loan amount of $350,000.
This in itself was not alarming. It was actually the norm, as many borrowers chose to use their medallions as collateral to make real estate purchases. Several of my clients used loan proceeds to finance restaurants, some of which are of high quality, and exist today. Of course, due to the fact that the taxi business is an immigrant-dominated business, their restaurants had a distinct ethnic flavor as well. This is part of what has always given New York a varied, vibrant culture that attracts foreign entrepreneurs, both rich and poor.
Lately, though, some of the borrowing requests came with unfortunate stories of failure, usually involving some in-law deadbeat. And since March 2000, the stock market margin calls started to increase as a result of the bursting of the dot-com bubble.
It is a Wall Street truism that when doormen and taxi drivers start touting and trading stocks, it is an indication that the market is overbought, and time to get out.
Strangely, I had never before encountered the fellow in my cubicle. And I was surprised to learn that he had been a member of the credit union for over 15 years. I had been in the employ of this credit union for seven years and a different credit union for an additional seven years, and had encountered most of the borrowers. His name, Abdul Najran, seemed to indicate at least some type of Muslim origin, not a material fact either pro or con.
I was impressed with his articulate speech, command of the English language, and calm demeanor. But, he had a problem. He had four loans in which the monthly payments exceeded $3,800 per month. Worse, his leasing company was now paying him only $2,200 per month for his two medallions, leaving him with a large shortfall, $1,600 per month.
I understood his problem, as this was becoming commonplace for many of his fellow medallion borrowers. And as he was beginning to offer potential solutions, I hoped that the shortfall could be mitigated by whatever it was that he had used the $350,000 in prior loans for. Hopefully, an investment in commercial real estate might throw off enough cash to compensate for the loss of lease income on the medallions.
So, I asked the question: “Mr. Najran, when you took the $350,000 in your prior loans, what did you do with the money?”
He clearly was uncomfortable with the question, just as many immigrants were uncomfortable with personal questions of any kind. I once asked a prospective borrower his name, and his response was, “Whaddya need that for?”
But, Mr. Najran’s discomfort was different. His body language became more fidgety, he stopped making eye contact. I could not discern if his discomfort was a measure of a personal failing, stupidity, or just good old immigrant paranoia.
What he wanted was relief, he said. He needed for us to forgive a portion of the loans so that the lease payments would cover the remaining portion of the loans.
I understood the concept of forbearance, but thought to myself that I certainly did not have the authority to make that kind of determination. However, I didn’t want him to know that yet, and still, if I was to advocate on his behalf, I needed to know what he did with the $350,000. So, I asked the question again.
“So, what happened with the money?” My query received less sympathy than my prior inquiry regarding the aforementioned $350,000.
My patience for tangential information and evasion was beginning to ebb. I do not suffer fools gladly, but I recognized that his manner and facility with the English language indicated that he was no fool. He was seeking debt forgiveness at most, and some relief at the very least. So, my restraint – as opposed to my loss of patience – was causing me some conflict. I must admit there are times that I may appear to be unsympathetic, even abrasive.
Then came his answer: “It’s gone,” he said with the typical resignation associated with personal misjudgment or failure.
“Gone?” I asked. “What do you mean gone?”
At this point, I was prepared to hear the tale of woe about a brother-in-law who he partnered with in some business venture like a restaurant that went belly-up, as half of all new restaurants do in the first year. Or, that he had bought hundreds of thousands of dollars worth of stock in some tech company that had irretrievably gone south. But, he didn’t want to tell me what happened. He seemed genuinely uncomfortable talking to a stranger regarding his personal business. So, he simply stuck to his story.
“It’s gone,” he repeated, his patience seeming to diminish at the same pace as mine – a contest in which we appeared to be equals.
I’ve learned over my years of experience that in order to survive the job, and get through the day with some semblance of peace of mind, I must be the winner in contests such as these.
Winning can take many different forms. In this case, I wanted an answer to my question, a simple question, if he wanted debt forgiveness. I wouldn’t go out of my way to help him in his quest without a legitimate answer – so, indeed, I held the power.
Then he cracked. He had been worn down by some combination of my persistence and his own desperation. So, when I impatiently repeated my dissatisfaction with “It’s gone?,” he blurted out where the money went.
“I sent the money to refugee camps in Afghanistan,” he said.
Big deal, I sarcastically thought to myself. He’s a humanitarian, probably an Afghan, not a Pakistani who has family and friends back home still. I only knew of one other Afghani in the taxi business. And I recalled that the Soviets and Afghans had been at war in the 80s, maybe as far back as the Carter Administration in the 70s.
I remember being glad that the Soviets had made a similar, stupid mistake, much like the USA had during our misadventure in Vietnam. But, I thought that was over with a long time ago, certainly by the time the Soviet Union fell in the early 90s. But still, war creates refugees who frequently become cab drivers in NYC, and I was guessing that Afghanistan was not an exception to that reality.
As a result, his answer did not stir in me any reaction other than, “okay, whatever, pal, it’s your money.” Except that it was borrowed money, our money.
I told him that I would be presenting his request to my supervisor or a group of supervisors since these income shortfalls were becoming more common as a result of the depression in the taxi industry. I made no guarantees, and mentioned to him that he might consider selling his medallions. His reply was that he would like to hold onto the business, that he was confident it would bounce back, and that he considered his request for relief to be a temporary measure.
He was impressive, charming, and well-mannered. And that beard was impressive as well. He was clearly a gentleman who needed a little help. I told him, if I could do anything to help him, I would, but it would not be my unilateral decision – rather a decision made by higher authorities. He thanked me for my time, and we shook hands.
To be continued…