Loan-shark lenders are out there, and they’re targeting federal retirees and veterans. They usually dupe retirees into borrowing against their pensions by marketing them as a sale and not a loan and failing to disclose high interest rates and fees. The Consumer Financial Protection Bureau and the New York Department of Financial Services recently filed a lawsuit against some of these predatory lenders.
Reps. Matt Cartwright of Pennsylvania and Gerry Connolly of Virginia have teamed up to introduce a bill that would protect federal, postal, and military retirees against these pension loan companies.
“Federal annuities were designed to provide retirees with a stream of guaranteed income that gives them a sense of financial security in their golden years,” Rep. Cartwright said. “Unfortunately, ‘pension advance’ companies often prey upon federal retirees and veterans.”
Their bill, the bipartisan Annuity Safety and Security Under Reasonable Enforcement (ASSURE) Act, would require full disclosure of the terms and conditions of finance charges to any situation where a federal or military pension is used as consideration for an “advance.” The bill also caps the interest rate on such an “advance” at prime plus six percent.
AFGE fully supports this bill, which currently has 24 co-sponsors.
“Paycheck by paycheck federal employees save for retirement and contribute to their pensions—they work too hard to lose their retirement savings to predatory lenders,” said AFGE President J. David Cox Sr. “AFGE thanks Representatives Cartwright and Connolly for introducing the ASSURE Act to protect federal employees and retirees from being financially exploited.”