Is help on the way for the CTA and other transit agencies that did business with beleaguered insurance giant AIG?
Transit officials from around the country - including Chicago - descended on Congress this week appealing for relief from their AIG entanglements.
"The officials warned that 31 of the nation's largest transit systems could face at least $2 billion in payments in the coming months if hundreds of the deals go bad," Crain'sreported this week. "The fallout could cripple rail and bus systems at a time when ridership is soaring."
But ProPublicareports today that the lobbying by transit officials "is paying off."
"Transit officials told ProPublica that they had 'hopeful' discussions with lawmakers on a plan to discourage banks from demanding payment. The plan would slap banks with a tax, up to 100 percent, on money they collect past what the transit authorities already promised to pay.
"As part of the now-defaulted deals, banks bought transit equipment from cities and then leased them back to the transit agencies to use at a discount. Today, many agencies are willing to hand over to banks money they set aside years ago for lease payments." CTA officials said this week that they weren't worried about their AIG-backed investments, even as one deal threatens Green Line service.
A new plan that was floated this week in Congress could be introduced as legislation in January, ProPublica reports, but that might be too late for some transit agencies who have bills coming due.
The Atlanta system, for example. has some deals going into default this week.
