Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

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
Ill. @GovernorQuinn signs patent troll law http://t.co/ugWf8zHpCm via @CrainsChicago
35 minutes ago
.@MBAMortgage : Mortgage apps increased 2.8% from one week earlier for week ending Aug. 22.
1 hours ago
Franchise businesses may face higher breach risk with POS systems HT @briankrebs http://t.co/LGE46DUk15
1 hours ago
About 1 in 3 consumers use plastsic for in-person purchases of less than $5, according to @CreditCardsCom survey.
3 hours ago
#NewsNow Bankrate cites Schenk on 100M membership reach http://t.co/iNwjpZRJp4
4 hours ago