President signs Mandate Relief Mandate

January 31, 2017 at 9:00 am Leave a comment


I have some good news and some bad news that you may have missed in the ongoing coverage of a certain executive order signed by President Trump last Friday.

The good news is that the President issued an executive order yesterday mandating that executive branch agencies couple any new proposed regulation with two existing regulations it is repealing. In addition, the cost of any new regulation must be offset by elimination of the costs associated with prior regulations.

Now for the bad news; as an independent agency overseen by a three member board, NCUA is not required to follow this order. In addition,  whether or not the CFPB is subject to the order depends on the outcome of an ongoing legal challenge claiming that the Bureau cannot be an independent agency if it is overseen by a single director.  There is, however, nothing to stop NCUA from voluntarily complying with this mandate relief mandate. Stay tuned.

Taxi Medallion Prices Are Plummeting, Endangering Loans

This uplifting headline is taken from an article posted yesterday by Bloomberg News.

Just how bad are things getting for medallion loans? According to Capital One Financial Bank, some 81 percent of its medallion loans are in default according to Bloomberg. Capital One is warning investors that it now believes more than half of its borrowers won’t be able to repay their medallion loans and that another 29 percent of borrowers are “stressed.”

It isn’t clear how many of Capital One’s loans are for NYC medallions. But, another bank, BankUnited, told its investors in November that nearly 59 percent of its loans secured by taxi medallions were under water. Close to 95 percent of BankUnited’s loans were for NYC Medallions.

The Bloomberg report comes on top of an article in the New York Times a couple of weeks ago openly speculating that ridesharing services have made yellow cabs a vestige of a bygone era. Furthermore, if the legislature legalizes ridesharing outside of New York City, even more downward pressure will be exerted on medallion values. As the bad news migrates from obscure blogs and trade publications to mainstream media outlets, I wonder if prices will fall even quicker. Here is where prices stood in December.

Entry filed under: General.

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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