Meeks and New York City Delegation Reintroduce Bill for Taxi Medallion Loan Forgiveness
New York, NY. - Today, Congressman Gregory W. Meeks, Senior Member of the House Financial Services Committee, reintroduced legislation that would provide significant financial relief for overly burdened taxi medallion owners by not considering debt forgiveness they receive as income for tax purposes. The bill, H.R. 2077, is cosponsored by the entire NYC delegation, and is bipartisan.
Medallion debt is burdening several thousand drivers because of unforeseen changes in the transportation industry, compounded by the economic fallout of COVID-19. Unfortunately, taxi drivers owe hundreds of millions of dollars on their medallions even though the price of a medallion has fallen about 80% since 2014. People of color and immigrants in particular have been affected by the precipitous drop in the value of a taxi medallion.
Some private lenders, notably Signature Bank, have forgiven debt owed by medallion holders. However, under current law, this debt relief would qualify as taxable income, making taxi drivers liable for five or six-figure tax bills. The “Taxi Medallion Loan Forgiveness Debt Relief Act” would ensure that debt relief would be excluded from gross income for tax calculations.
“Taxi drivers in New York City were sold a false promise and placed into what’s become a debt trap they couldn’t have anticipated. Some financial institutions are doing the right thing by forgiving this crippling debt, but because that relief is considered income by the federal government, medallion owners are further burdened by enormous tax bills. This legislation is an important step towards justice for taxi drivers who’ve unfairly been burdened by enormous debt,” said Rep. Gregory W. Meeks.
“We are proud to stand with Congressman Meeks in support of his medallion owner-driver debt relief legislation. Congressman Meeks has shown unwavering commitment to uplifting his New York City constituents, including the hardworking taxi owner-drivers who keep our city moving. NYTWA has been raising the alarm on the crisis of poverty and life-long debt caused by the medallion crash caused by unsavory lenders, lax oversight, and unregulated app-dispatch companies that choked NYC streets without limit. This bill removes the obstacle of a high tax liability, making way for our members to achieve real debt forgiveness. Otherwise, they would be trading in one debt for another. Our campaign for a guarantee program to protect owner-drivers against risk of losing their homes and assets due to a default and to incentivize a maximum loan cap of $125,000 marches forward with more confidence and momentum," said Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance.
Ron Sherman, President of the Metropolitan Taxicab Board of Trade said, “We applaud Congressman Meeks for this necessary legislation that will remove additional burdens on struggling medallion owners that have worked with their lenders to restructure their debt. These owners purchased medallions in good faith and have served the riding public with safe and reliable transportation. They are already trying to recover from the disruptions caused by the rideshare industry and now the devastating COVID-19 pandemic. It would be tragic if, in the course of working with lenders to draw down debt, these owners get walloped with a tax bill on top of everything else. This bill is an important piece of the puzzle to provide relief for medallion owners and to strengthening the taxi industry moving forward.”