In a May 21 letter to the National Credit Union Administration, Senate Minority Leader Chuck Schumer (D-N.Y.) asked the regulator to conduct an immediate review of its supervisory practices in the wake of “deeply troubling conduct” by credit unions involved in New York’s taxi medallion business.
Schumer pointed to a recent investigation by the New York Times that found that many NCUA-regulated institutions “worked to artificially inflate taxi medallion prices while hooking taxi drivers with reckless, exploitative loans. As a result of these predatory practices, taxi drivers lost their life savings and were left with crushing debt once the market crashed and the value of these medallions rapidly decreased.”
A recent NCUA Inspector General report suggested that with a timelier and more aggressive supervisory approach, some of the losses cab drivers experienced could have been mitigated, Schumer added. He requested that NCUA to respond to Congress with changes that should be made to its current supervisory practices to protect these consumers against this type of predatory lending in the future.