Taxi Medallion Loans Ruined Thousands While Banks and Brokers Cleaned Up

An investigation by The NY Times found that the price of a taxi medallion jumped from $200,000 to more than $1mn and forced thousands to take out loans they could not afford to pay back; there were 7 government agencies who opened investigations or did a report on the rising issue; none of that mattered since the warning signs were ignored and the market eventually collapsed in 2014; thousands of immigrant drivers lost everything, some committed suicide, 950 filed for bankruptcy and many are still trying to work their way back today; a small group of banks and brokers were on the other end making boatloads of money pushing the risky loans; their last 3 mayors all put political allies in the Taxi and Limousine Commission to ensure the sale of medallions to balance budgets and fund projects; the market had many of the same hallmarks of the mortgage crisis including inflating prices, large fees and forfeiture of legal rights; even after the market collapsed loan terms were not softened and officials placed the blame on ride sharing services. Source.

  • Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.

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