Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Market
Retirees' Pension Advances Have High Rates
NEW YORK (5/6/12)--Some companies targeting retirees with  pension advance offers are getting scrutiny from regulators because the companies charge steep interest rates, they aren't disclosing their fees in their ads or contracts,  and their operations fall outside state and federal banking regulations, according to The New York Times (April 27).

The Times conducted a study of more than two dozen pension-based loan contracts and found that after factoring in fees, the interest rates on these loans ranged from 27% to 106%. To qualify for the loan, the borrowers were sometimes required to take out an insurance policy naming the lender as the sole beneficiary.

The companies are courting retirees with public pensions--such as military veterans, police officers, firefighters and teacher--and offering to make short-term loans. They advertise through online and local newspaper ads, and circulars. 

Legal aid offices in several states--Arizona, California, Florida and New York--said they've received a surge in complaints. The Consumer Financial Protection Bureau and the Senate's Committee on Health, Education Labor and Pensions are examining the loans, said the Times.


RSS





print
News Now LiveWire
Better economic & #CU conditions,leading to higher rates in '15,'16, will boost CU earnings, asset quality,capital http://t.co/rmJvi3MIpQ
6 hours ago
RT @CUNA: Today is the first day of #CUYouthMonth How is your #creditunion celebrating?
11 hours ago
New @FICO score metric expected this week, will include utility payments http://t.co/l0hGhilMqQ
12 hours ago
.@TheNCUA increased supplier diversity in 2014 by 49%, although NCUA’s workforce diversity levels declined slightly.
12 hours ago
Also from FFIEC today, council announces reappointments of Mary Hughes and Lauren Kingry to its State Liaison Committee. 2of2
12 hours ago