Next week Rep. Matt Cartwright (D-PA) and Rep. Gerry Connelly (D-MA) will introduce the ASSURE (Annuity Safety and Security Under Reasonable Enforcement) Act. The bill would protect federal, postal and military retirees by expanding the Truth in Lending Act disclosure provisions to any situation where a federal or military pension is used in consideration for an “advance.”
The APWU Legislative and Political E-Team previously reported on “pension advance” firms that often prey on federal retirees and veterans by skirting state and federal laws that prohibit annuitants from assigning their pensions to a third party. These firms often require borrowers to sign over all or part of their monthly pension checks for loans that frequently carry effective interest rates ranging from 27 percent to 106 percent! To qualify for one of the loans, borrowers are sometimes required to take out life insurance policies that name the lender as the sole beneficiary. Retirees who have spent a lifetime earning a federal annuity can sink in debt under such loan terms that are often undisclosed in the lenders’ ads or contracts.
The legislation would also cap the interest rate on such advance loans at prime plus six percent. It also would allow victims of such predatory lending schemes to sue firms that break the law.
Tell your member of Congress to protect federal retirees from predatory lending and support the ASSURE Act!
To learn more about federal pension “advance” firms, please click here.
Federal retirees targeted by high interest pension-‘advance’ lenders
Consumer protection advocates, along with federal and state authorities have expressed concern over the increasing number of retired public pension beneficiaries being targeted by firms offering pension-based advances. Advocates contend these advances are actually disguised loans and a recent report found the loans can have “effective interest rates [ranging] from 27 percent to 106 percent.”
Pension-based lenders aggressively target federal and state pension holders with the lure of a quick cash loan, while often hiding the long-term costs for borrowing which can result in a downward spiral of debt for many retirees. The Senate’s Committee on Health, Education, Labor and Pensions and the Consumer Financial Protection Bureau are said to be investigate the loans as these financial products currently have spotty regulation due to legal loopholes.
For more on public pensioners’ targeted by high interest loans, please click here.
If you are an APWU Retiree who has experienced any problems with a pension-advance loan, please contact APWU’s Legislative & Political Department at 202-842-4211.
via APWU Legislative and Political E-Team