FAST FIVE: 'They Were Conned': How Bankers Devastated Thousands Of New York City Taxi Medallion Owners
The Times noted that lending practices were as fraudulent as the subprime mortgage industry pre-summer 2007, that eventually led to the 2008 global economic meltdown.
The money was so good that major financial institutions wanted in on the taxi industry after 2008.
“Much of the devastation can be traced to a handful of powerful industry leaders who steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst.
Over more than a decade, they channeled thousands of drivers into reckless loans and extracted hundreds of millions of dollars before the market collapsed.” “The practices were strikingly similar to those behind the housing market crash that led to the 2008 global economic meltdown: Banks and loosely regulated private lenders wrote risky loans and encouraged frequent refinancing; drivers took on debt they could not afford, under terms they often did not understand-Some industry leaders fed the frenzy by purposefully overpaying for medallions in order to inflate prices, The Times discovered.
The city Taxi and Limousine Commission went the furthest of all, turning into a cheerleader for medallion sales.