19 money moves that people who make less than 60

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By Brian M. Photographs and Video by Kholood Eid. The call came from a prominent businessman who was selling a medallion, the coveted city permit that allows a driver to own a yellow cab instead of working for someone else. If Mr. After years chafing under bosses he hated, Mr.

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By Brian M. Photographs and Video by Kholood Dho. The call came from a prominent businessman who was selling a lezs, the coveted city permit that allows a driver to own a yellow cab instead of working for someone.

If Mr. After years chafing under bosses he hated, Mr. Hoque thought his dreams of wealth and independence were coming true. Hoque handed over a check and received a stack of papers. He signed his name and left, eager to tell his wife. Over the peopke year, a spate of suicides by taxi drivers in New York City has highlighted in brutal terms the overwhelming debt and financial plight of medallion owners.

All along, officials have blamed the crisis on competition from ride-hailing companies such as Uber and Lyft. But a New York Times investigation found 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. These business practices generated huge profits for bankers, brokers, lawyers, investors, fleet owners and debt collectors. The leaders of nonprofit credit unions became multimillionaires.

Medallion brokers grew rich enough thar buy yachts and waterfront properties. One of the most successful bankers hired the rap star Nicki Minaj to perform at a family party. But the methods stripped immigrant families of their life savings, crushed drivers under debt they could not repay and engulfed an industry that has long defined New York.

More than medallion owners have filed for bankruptcy, according to a Times analysis of court records. Thousands more are barely hanging on.

The practices were strikingly similar to those behind the housing market crash that led to the 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 koney often did not understand. Some big banks even movez the taxi industry in the aftermath of the housing crash, seeking a new market, with new borrowers. The combination of easy money, eager borrowers and the lure of a rare asset helped prices soar far above amke medallions were really worth.

Some industry leaders fed the frenzy by purposefully overpaying for medallions in order to inflate prices, The Times. About 4, drivers bought medallions in that period, records. They were excited to buy, but they were enticed by a dubious premise. From totaxi industry leaders artificially inflated medallion prices, which helped cause them to quintuple.

Since prices crashed in latehedge funds have bought hundreds of medallions seized from bankrupt drivers. They were conned. After the medallion market collapsedMayor Bill de Blasio opted not to fund a bailout, and earlier this year, the City Council speaker, Corey Johnson, shut down the committee overseeing the taxi industry, saying it had completed most of its work.

Over 10 months, The Times interviewed people, built a database of every medallion sale since and reviewed thousands of individual loans and other documents, including internal bank records and confidential profit-sharing agreements. The investigation found tha after example of drivers trapped in exploitative loans, including hundreds who signed interest-only loans that required them to pay exorbitant fees, forfeit their legal rights and give up almost all their monthly income, indefinitely.

A Bangladeshi immigrant said he was told to lie about his income on his loan application; he eventually lost his medallion.

A Haitian immigrant who worked to exhaustion to make his monthly payments discovered he had been paying only interest and went bankrupt. It is unclear if the practices violated any laws. Lenders developed their techniques in New York but spread them to Chicago, Boston, San Francisco and elsewhere, transforming taxi industries across the United States.

In interviews, lenders denied wrongdoing. They noted that regulators approved their practices, and said some borrowers made poor decisions and assumed too much debt. They said some drivers were happy to use climbing medallion values as collateral to take out cash, and that those who sold their medallions at the height of the market made money.

The lenders said they believed medallion values would keep increasing, as they almost always. No one, they said, could have predicted Uber and Lyft would emerge to undercut the business.

But she acknowledged that officials saw red flags and could have done. So the T. The lenders watched it happen. Joshi, who left the commission in March. Why stop it? Every day, aboutpeople hail a New York City yellow taxi.

Most probably do not know they are participating in an unconventional 19 money moves that people who make less than 60 system about as old as the Empire State Building.

The city created taxi medallions in Unlicensed cabs crowded city streets, so officials designed about 12, specialized tin plates and made it illegal to operate a taxi without one bolted to the hood of the car. People who bought medallions could sell them, just like any other asset. Over time, as yellow taxis became symbols of New York, a cutthroat industry grew around. A few entrepreneurs obtained most of the nonindependent medallions and built fleets that controlled the market.

Allegations of corruption, racism and exploitation dogged the industry. Some fleet bosses were accused of cheating drivers. Some drivers refused to go outside Manhattan or pick up black and Latino passengers. Fleet drivers typically worked 60 hours a week, made less than minimum wage and received no 19 money moves that people who make less than 60, according to city studies.

Still, driving could serve as a path to the middle class. Drivers could save to buy an independent medallion, which would increase their earnings and give them an asset they could someday sell for a retirement nest egg.

Those who borrowed money to buy a medallion typically had to submit a large down payment and repay within five to 10 years. The conservative lending strategy produced modest returns. He was a serious student and a gifted runner, despite a small and stocky frame. He supervised dozens of schools and traveled on a government-issued motorcycle.

Inwhen he was 33, he married Fouzia Mahabub. That same year, several of his friends signed up for the green card lottery, move their thirst for opportunity was contagious.

He applied, and won. His wife had an uncle in Jamaica, Queens, so they went. They found a studio apartment. Hoque yhan to work in education, but he did not speak enough English. A friend recommended the taxi industry. It was an increasingly common move for South Asian immigrants. Over all, just 9 percent were born in the United States. He worked 5 a. He often felt lonely on the road, and he developed back pain from sitting all day and diabetes, medical records.

He could have worked fewer shifts. He also could have moved out of the studio. But he drove as much as feasible and spent as little as possible. He had heard the city would soon be auctioning off new medallions. He was saving to buy one. They were the sons of longtime industry leaders, and they had new ideas for making money. Murstein attended business school and started his tthat at Bear Stearns and Salomon Brothers, the investment banks.

When he joined the taxi business, he has said, he tnat his family to sell off many medallions and to establish a bank to focus on lending. Medallion Financial went public in Dozens of industry veterans said Mr.

Murstein and his father, Alvin, were among those who helped to move the industry to less conservative lending practices. The industry veterans said the Mursteins, as well as others, started saying medallion values would always rise and used that idea to focus on lending to lower-income drivers, which was riskier but more profitable. Mohammad Hossain emptied his savings to buy a taxi medallion.

He had no idea he had just signed away his financial freedom. Have you thought about doing that? What are you thinking about? Who me? I bought medallion moey the city. I 06 city will help me. You know? I see on the I know so many drivers they kill themselves. But I have a family.

I love my family. My life is more important for my family. I love my family, than medallion.

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