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NCUA Chairman: Taxi medallion solution 'delicate balancing act'
"The turmoil in the city's taxi industry and the crisis drivers face as they struggle to pay loans secured by their taxi medallions is a matter of deep concern," wrote NCUA Chairman Rodney Hood in an op-ed for the New York Daily News discussing the challenges faced by borrowers, credit unions and the NCUA due to recent changes in the taxi medallion market.
Hood previously responded to banker attacks challenging the NCUA's oversight authority in light of the New York taxi medallion crisis. NAFCU also defended the credit union industry to lawmakers following the bankers' attacks.
While delinquency rates on taxi medallion loans have historically been very low, Hood in the op-ed noted that the "NCUA issued multiple warnings against concentration risk, including specific guidance on this issue, beginning in 2010." The root of the issue came "when smartphone-app-based ride-sharing services entered the New York market, resulting in competition with traditional taxicabs that cut deeply into that market and into drivers' incomes."
The NCUA's role in helping remedy the situation "must balance the needs of borrowers alongside its responsibility – mandated under federal law – to minimize losses to the National Credit Union Share Insurance Fund, which protects 117 million credit union account holders. This is a delicate balancing act and requires careful and judicious decision-making," Hood wrote.
Read the entire op-ed here.