NEW YORK CITY (WABC) -- Thousands of yellow taxi drivers have been drowning debt from loans taken to pay for medallions that were overvalued.
A New York City Council task force on the medallion crisis said they are endorsing a debt forgiveness plan created and championed by the New York Taxi Workers Alliance.
Building on that momentum, Congressman Gregory Meeks announced Friday federal legislation aimed to further relieve drivers' debt burden by limiting tax liability on the forgiven debt.
The bill would prevent any debt forgiveness from being federally taxed.
"Drivers finally free of unsustainable debt will now face an impossible to pay five or six-digit tax bill," Meeks said. "That would not be justice."
The taxi industry has long fought for relief pointing out the city has profited for years from the sale of medallions, even as buyers, often immigrants, were being steered into predatory loans.
"On the promise of being part of the American Dream and have seen that dream turned into a nightmare, we owe it to you to act and to act quickly," said NYC Councilman Stephen Levin.
Mayor Bill de Blasio said Thursday it is not a "straight-up public bailout." He said it's a different model, largely based on private financing to help forgive hundreds of thousands of dollars some medallion owners face.
"This task force that was put together, working with the council and with stakeholders, has come up with a different kind of model, which would be largely based on private financing. The model has not been detailed yet," de Blasio said.
The plan is not rock solid but the mayor expressed that it was a start.
"We want to help these taxi drivers. They've been through hell. We want to find a way to help them and their families," de Blasio said.
Details of the plan will be announced by the end of the month.
Then the council plans to explore leveling the playing field for the black car and livery industry, possibly easing regulations services that Uber and Lyft are exempt from.
* More New York City news
* Send us a news tip
* Download the abc7NY app for breaking news alerts
* Follow us on YouTube
Bailout plan could relieve taxi drivers burdened with debt in Manhattan