Helping Cabbies Pick Up Their Finances
Helping the city's new immigrants make their American dreams come true is a special mission that two New York City credit unions, LOMTO and Melrose, take very seriously. The LOMTO Federal Credit Union, with more than $200 million in assets and locations on the Upper West Side and in Queens, began life with a very specific purpose: to help taxi and livery drivers to succeed in New York City. Back in 1934, a group of owner/drivers banded together and formed the League of Mutual Taxi Owners Inc. In 1936, the group was granted a charter to form a federal credit union and later changed its name to LOMTO Federal Credit Union. According to Richard Kay, LOMTO's CEO, in the earliest days of New York City's medallion system, owner/drivers found it nearly impossible to get bank loans. Today, the average New York City medallion cost averages about $700,000. "Some of the old-timers who aren't around anymore said that there were signs in some banks that said 'no beggars, no solicitors and no taxi drivers,'" Kay recalled in an email. Kay points out that the city's taxi industry has always been an immigrant industry, which has seen waves of people from all parts of the world, most recently from the Middle East. Melrose Credit Union, in existence since 1922, was originally established to serve residents and small business owners in the Bronx. Now a highly successful credit union with nearly $1 billion in assets and 20,000 members spread across the nation, it is also a major lender to taxi and black car livery drivers interested in purchasing New York City medallions. Rob Nemeroff, director of marketing for Melrose Credit Union, estimates that immigrant taxi drivers are roughly 20 percent African and West African, 20 percent South Asian, 20 percent Caribbean, 20 percent Eastern European and Middle Eastern and 20 percent Hispanic and from the Pacific Rim. He said lending to the New York City medallion industry is a very niche market that only experienced organizations can handle. "We've been lending to New York City's immigrant communities since 1922. We know the borrowers and we know the business-that's why they all come to us," he said. He went on to say that credit union officials implore the drivers to be financially responsible. "We remind them that they're buying a business," Nemeroff said. The LOMTO website details how the first contributions to the credit union were able to assist members with taxi and livery car problems, such as buying a new set of tires, repairing faulty transmissions and even helping with medical bills. Especially for taxi and livery drivers, LOMTO provides assistance when dealing with the city's Taxi and Limousine Commission, providing a free representative when drivers get ticketed, towing reimbursement and discounted health and dental insurance. Kay added that the organization also lends to owners of Chicago taxi medallions. "For the most part, there's almost a zero default rate on medallion loans," explained Nemeroff. He also said Melrose has very few delinquencies related to their medallion financing. "And if a borrower has repayment issues, we do what we can to help them get back on top," he said. "The last thing we want to do is repo a medallion." LOMTO is open to anyone who lives, works, or worships in the Upper West Side. For more information, visit lomto.com.
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