‘They Were Conned’: How Reckless Loans Devastated a Generation of Taxi Drivers

Walter Rabin, who led Capital One’s medallion lending division between 2007 and 2012 and has led Signature Bank’s medallion lending division since, stated he was one of the business’s most conservative lenders. He stated he couldn’t communicate for the brokers and fleet homeowners with whom he labored.

Mr. Rabin and different Signature executives denied fault for the market collapse and blamed town for permitting ride-hail corporations to enter with little regulation. “It’s the City of New York that took the biggest advantage of the drivers,” stated Joseph J. DePaolo, the president and chief government of Signature. “It’s not the banks.”

New York Commercial Bank stated in a assertion that it started issuing medallion loans earlier than the housing disaster and that they have been a very small half of its enterprise. The financial institution didn’t interact in dangerous lending practices, a spokesman stated.

Mr. Messados stated in an interview that he disagreed with interest-only loans and different one-sided phrases. But he stated he was caught between banks creating the loans and drivers clamoring for them. “They were insisting on this,” he stated. “What are you supposed to do? Say, ‘I’m not doing the sale?’”

Several lenders challenged the concept debtors have been unsophisticated. They stated that some received higher offers by negotiating with a number of lenders without delay.

Mr. Greenbaum, Mr. Chipman and Mr. Sapino declined to remark, as did Capital One.

Some fleet homeowners labored to control costs. In essentially the most distinguished instance, Evgeny Freidman, a brash Russian immigrant who owned so many medallions that some known as him “The Taxi King,” stated he purposefully overpaid for medallions offered at metropolis auctions. He reasoned that the upper costs would change into the business customary, making the medallions he already owned price extra. Mr. Freidman, who was companions with Michael Cohen, President Trump’s former lawyer, disclosed the plan in a 2012 speech at Yeshiva University. He not too long ago pleaded responsible to felony tax fraud. He declined to remark.

As medallion costs stored growing, the business grew to become strained. Drivers needed to work longer hours to make month-to-month funds. Eventually, mortgage information present, many drivers had to make use of virtually all their earnings on funds.

Source link Nytimes.com

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