The New York State Attorney General has apparently begun an inquiry into the lending practices – spanning than 10 years – involving immigrant taxi drivers.
Beyond that, New York City Mayor Bill de Blasio has himself put into motion his own investigation into the brokers behind those loans.
Both moves, reported the New York Times, “marked the government’s first steps toward addressing a crisis that has engulfed the city’s yellow cab industry. They came a day after The New York Times published a two-part investigation revealing that a handful of taxi industry leaders artificially inflated the price of a medallion — the coveted permit that allows a driver to own and operate a cab — and made hundreds of millions of dollars by issuing reckless loans to low-income buyers.”
The investigation also found, the Times continued, that “regulators at every level of government ignored warning signs, and the city fed the frenzy by selling medallions and promoting them in ads as being “better than the stock market.”
“Today I ordered a joint investigation by the Taxi and Limousine Commission, Department of Finance and Department of Consumer Affairs into predatory practices by brokers in the taxi industry,” said de Blasio on Monday. “The 45-day review will identify and penalize brokers who have taken advantage of buyers and misled City authorities. The review will set down strict new rules that prevent broker practices that hurt drivers. It’s unacceptable to prey on hardworking New Yorkers trying to support their families and we’ll do all that we can to put an end to it.”
The investigations are “the government’s first steps toward addressing a crisis that has engulfed the city’s yellow cab industry,” noted governing.com. “They came a day after The New York Times published a two-part investigation revealing that a handful of taxi industry leaders artificially inflated the price of a medallion — the coveted permit that allows a driver to own and operate a cab — and made hundreds of millions of dollars by issuing reckless loans to low-income buyers.”
The investigation also found that regulators at every level of government ignored warning signs, and the city fed the frenzy by selling medallions and promoting them in ads as being “better than the stock market,” Governing magazine also reported. “The price of a medallion rose to more than $1 million before crashing in late 2014, which left borrowers with debt they had little hope of repaying. More than 950 medallion owners have filed for bankruptcy, and thousands more are struggling to stay afloat.”