Uber and other ridesharing companies are not just killing Chicago cabdrivers—they're also hurting banks and other lenders involved in the taxi medallion market here.

This summer, New York-based Signature Bank revealed that it has placed the majority of its Chicago medallion loans under heightened scrutiny and is restructuring debts tied to the taxi industry.

Capital One abruptly quit Chicago's medallion market last year, according to a lawsuit, and medallion owners say other lenders have left it, too. Medallion Financial, a publicly traded firm that owns 159 Chicago medallions, has slashed the value of that holding 22 percent over the past year and a half. Its own stock price is off 34 percent from last year.

For financial institutions, the days when the Chicago taxi market served as a tidy niche business are over. Given how quickly ridesharing firms have gained customers, it may be one that never recovers.

“We know that Uber and Lyft are presenting stress to any bank with exposure to this asset class,” says Chris McGratty, managing director at investment bank Keefe Bruyette & Woods in New York who follows banks, including Signature.

Signature, which has provided loans for medallion acquisitions and refinancing deals, highlighted this summer how the weakening market in Chicago forced it to react. On a call with analysts in July, CEO Joseph DePaolo said the company put about two-thirds of its portfolio of 753 Chicago taxi loans on an internal watch list. In June and July, the lender restructured $112 million of its $172 million portfolio by changing loan interest rates, requiring borrowers to put up more collateral and offering longer amortization schedules.

DePaolo added that the current loan-to-value ratio for its Chicago taxi debts was 92 percent. A high loan-to-value ratio indicates that borrowers' debt levels are approaching equilibrium with the underlying value of the asset and serves as a warning sign for distress.

Though the bank had written off just $1.9 million in local taxi debt at the time of the call, investors reacted skittishly to the news. Signature's second-quarter earnings beat analysts' projections, but its stock fell temporarily, in part because of its exposure to the Chicago medallion market, according to JPMorgan Chase research. (The firm's stock is up 13.2 percent over last year, as taxi lending is a relatively small part of its business. It closed at $133.05 on Aug. 28.)

Walter Rabin, CEO of the Signature subsidiary that handles the firm's medallion lending, acknowledges that the Chicago market has shifted, pointing to the rise of ridesharing companies as well as a relatively new cap on how much medallion owners can charge drivers. The bank moved the Chicago taxi loans to its watch list as a proactive measure, he adds.

“We're forward-looking, and when we see changes in the lending environment . . . we at times will make risk-rate adjustments to a class of loans,” Rabin says. Signature hasn't issued any new taxi loans here this year, though Rabin says that's due to a dearth of opportunities to lend.