Meeks and New York Delegation Announce Bill to Help Relieve Taxi Medallion Owners of Debt
New York, NY - Today, Congressman Gregory Meeks unveiled legislation that would help provide some financial relief for taxi medallion owners by not considering debt forgiveness they receive as income. He was joined by Members of the New York City and Long Island delegations, State and City elected officials, the Taxi Workers Alliance (TWA), and Representatives Carolyn Maloney, Nydia Velazquez, State Senator Jessica Ramos; Council Members Ydanis Rodriguez, Mark Levine, Stephen T. Levin, and Brad Lander; Assembly Members Michael DenDekker and Alicia Hyndman; Executive Director of the New York Taxi Workers Alliance Bhairavi Desai, and Scott A. Shay, Chairman of the Board at Signature Bank. The bill, H.R. 5617, is cosponsored by the entire NYC delegation, and is bipartisan with the support of Rep. Peter King.
Several thousand drivers are burdened by medallion debt which can run over a million dollars, and nearly a thousand have already filed for bankruptcy. In total, taxi drivers owe hundreds of millions of dollars on their medallions while the price of a medallion has fallen about 80% since 2014. People of color and immigrants in particular have been effected 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-digit tax bills. The "Tax Relief for Taxi Drivers Act" would ensure that debt relief would be excluded from gross income for tax calculations.
"Taxi drivers in New York 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.
"Taxicab drivers face suffocating, unsustainable debt from purchasing medallions. We need to use every tool at our disposal to assist them, which is why I've previously written the City calling for the creation of an assistance fund, a step that seems increasingly feasible. It would be a sad irony if assistance from that fund were counted as taxable income and these New Yorkers who've already suffered so much ended up with an enormous tax liability. That's why I'm proud to cosponsor Rep. Meeks' bill to prevent this outcome. I look forward to working with all my colleagues going forward to provide meaningful help to medallion holders," said Rep. Nydia M. Velázquez.
"After years of predatory lending and inflated medallion prices, our city's yellow cabs became financial traps for thousands of drivers. And those hurt most are disproportionately immigrants and people of color. It's past time we make these hardworking New Yorkers whole. The Tax Relief for Taxi Drivers Act will make sure that defrauded New York taxi drivers will get the debt relief they need and deserve and not face absurd IRS tax bills. I'm proud to join my friend and colleague Congressman Meeks on this much needed bill and thank him for his leadership," said Rep. Carolyn B. Maloney.
"I am proud to be a co-sponsor of Congressman Meek's bill, the Tax Relief for Taxi Drivers Act because this legislation is a huge step in the right direction to undo the injustice that has burdened far too many of New York City's taxi drivers. The Taxi Medallion Loan Crisis has stripped families, especially immigrant families, of their life, liberty and ability to pursue the American Dream. Because of exploitative lending practices, thousands of NYC taxi drivers have been led down a path towards financial ruin. In tragic and unjust instances like this, it is the duty of government to intervene and prevent these big lenders from pocketing millions upon millions of dollars from working Americans under false loan advertisements," said Rep. Yvette Clarke.
"Taxi drivers have worked tirelessly for decades to serve New Yorkers. They have been an essential part of our city and have played by the rules. They have hit hard times through no fault of their own. These struggling drivers and medallion owners do not deserve to have their livelihoods ripped away from them. They desperately need assistance and we must step-up to help stop the suffering, and ease this crisis. I am committed to doing everything possible to accomplish that critical goal, and the Tax Relief for Taxi Drivers Act is an important effort towards providing relief for those who are hit with unfair tax bills. I'm proud to support this legislation and will work with Congressman Meeks to move it through the House," said Rep. Grace Meng.
"Taxi drivers have spent their careers working hard to provide for their families and save for their retirement. Serious changes in the market, and at times misleading marketing of medallions as a ‘safe bet' have suddenly left so many hardworking people with no plan for their future despite their best efforts. These individuals deserve the financial stability they planned for. That is why I am glad to join Congressman Meeks in introducing this critical legislation to provide taxi medallion owners with critical relief, and I will continue working to ensure they are made whole," said Rep. Adriano Espaillat.
"Taxi drivers in this city are suffering, plain and simple. To add insult to injury, even when private lenders forgive their debts, these medallion holders still face enormous tax bills. I'm proud to be working with Congressman Meeks to protect our taxi drivers from such unfair punishment," said Rep. Max Rose.
"Taxi drivers across New York have endured crippling financial hardship over the past six years. In their pursuit of the American dream, taxi drivers were instead crushed by unconscionable loans and high tax burdens. Congressman Meek's legislation will provide great relief to these drivers and I look forward to seeing this federal legislation pass," said State Senator Jessica Ramos.
"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 caused by the medallion crash caused by unsavory lenders, lax oversight, and unregulated app-dispatch companies that choked our streets without limit. Now, our fight has been renewed and strengthened by the work of Congressman Meeks, along with others in his delegation. Drivers are winning," said Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance.
"Signature Bank has worked with taxi medallion owner-drivers constructively over the past several years by forgiving debt to make their loans affordable. We applaud Congressman Meeks' leadership in putting forward a bill that would relieve these owner-drivers of being forced to pay income tax on this forgiveness of debt. The passing of this bill would allow these owner-drivers to continue to sustain their livelihoods. Otherwise, taxing this forgiveness of debt would be extremely detrimental and place them in a very precarious financial position," said Scott A. Shay, Chairman of the Board at Signature Bank.
"I thank all of the individual taxi medallion owners who have advocates and voiced their concerns for years. Today, thanks to the support of Congress Members Gregory Meeks, Nydia Velázquez, Carolyn Maloney and the New York Congressional Delegation, we are one step closer to giving justice to the Yellow taxi drivers. As Chairman of the Transportation Committee I have called for a bailout in 2014, we must rescue our drivers who are suffocating in debt. I will continue working with Speaker Corey Johnson, my colleagues, and advocates to ensure that we create a mechanism that will financially support thousands of medallion owners drowning in debt," Council Member Ydanis Rodriguez, Chairman of the Transportation Committee, and Co-Chair of the Taxi Medallion Task Force.
"Independent owner-drivers who were assured they were making a good investment in financial assets regulated by New York City are now enduring extraordinary financial hardships through no fault of their own. The progress that is being made to help these drivers would be undone if these drivers are further penalized through the tax code by having debt relief taxed as income. Congressman Meeks' bill will lift this burden and give further hope to these long suffering New Yorkers," said Council Member Mark Levine.
"The bursting of the taxi medallion bubble, which was allowed to balloon without oversight, left thousands of taxi medallion owners in financial ruin. Thank you to Representative Meeks and to the panel who are bringing together creative solutions to relieve taxi medallion owners of the crushing debt caused by lenders overleveraging the value of medallions," said Council Member Brad Lander.
"I am heartened to see Congressman Meeks and his colleagues take action to relieve taxi medallion owners of the crushing financial debt that they have been forced to endure. For the past five years, we have seen the human toll and suffering that massive debt has taken on taxi workers; removing the taxable income designation from forgiven debt is a compassionate and reasonable policy," said Assembly Member DenDekker.
"Abusive loan practices and egregious medallion prices have burdened taxi medallion owners in the ever changing industry. Congressman Meeks Tax Relief for Taxi Drivers Act will aid medallion owners who have been granted debt relief a chance to also find some relief from tax burdens. I am proud to support these efforts ensuring a push for equity and fair practices. It is well overdue," said Assembly Member Alicia Hyndman.