Medallion Pays Off Entire Bank and Noteholder Facility; Adds Another Independent Director

NEW YORK, May 27, 2003 -- Medallion Financial Corp. announced today that it has successfully terminated all of its outstanding obligations to its prior bank group and senior noteholders in its largest operating subsidiary, Medallion Funding Corp., by paying off all remaining amounts. This follows last month's similar payoff of its parent company debt. In all, the Company repaid approximately $375,000,000 of committed debt to the banks and noteholders in less than two years. The Company now has no debt, covenants, or other operating restrictions at its largest operating subsidiary.

Andrew Murstein, President of the Company, stated, "We are extremely proud of our management team and employees who successfully executed this highly difficult task in a very short time span, all while retaining our strong position in our valuable franchises of taxicab medallion and commercial lending. With these payoffs, we are now free to again manage and grow our business as we desire, for the benefit of our shareholders, and to regain the momentum we have previously demonstrated."

Larry Hall, Medallion's Chief Accounting Officer stated, "The Company remains in a strong capital position, with only $240,437,000 of debt on a capital base of $162,295,000, a leverage ratio of 1.48 to 1. In addition, the Company's traditionally high quality, low loan loss portfolio, has weathered this economic downturn extremely well. Our delinquencies have actually decreased over the last year, and we are well-positioned for growth in all of our key market segments. The Company has access to over $125,000,000 of cash and credit line availability to start the next phase of our development and fund our growth into the future."

Separately, the Company is pleased to announce that Mr. Frederick Menowitz has been appointed to the Company's Board of Directors. Mr. Menowitz has been an active investor in the real estate industry and has established numerous business relationships with New York banks and financial institutions over the last 30 years. He is a graduate of the University of Virginia where he received his BA degree, and is also a graduate of the University of Virginia School of Law. He is a member of the American Bar Association, the New York State Bar Association, the Queens Chamber of Commerce, the Elmhurst, New York Chamber of Commerce, and numerous other for profit and not-for profit institutions.

Mr. Murstein concluded, "We are very pleased to add such a distinguished and well respected Board member as Mr. Menowitz. He is the third Board member appointed in the last six months, all of whom are independent directors who further strengthen our Board. We firmly believe we have one of the strongest, independent, and most experienced Boards around. Mr. Menowitz joins Governor Mario Cuomo, Senator Lowell Weicker, and Messrs. David Rudnick, Stanley Kreitman, and Henry Jackson as non-management members of the Company's Board.

Medallion Financial Corp. is a specialty finance company with a leading position in the origination and servicing of loans financing the purchase of taxicab medallions and related assets. The Company also originates and services commercial loans financing small businesses in other targeted industries, and operates the largest taxicab rooftop advertising business in the world. The Company and its subsidiaries have lent over $1 billion to the taxicab industry and commercial equipment industries.

Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, costs, sales, net investment income, earnings, and growth. Medallion's actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, those factors discussed under the heading "Investment Considerations," in Medallion's 2002 Annual Report on Form 10-K.