Minnesota Attorney General – Like CFPB – Sues Pension Advance Company

Minnesota Attorney General – Like CFPB – Sues Pension Advance Company

The Minnesota Attorney General has followed the lead of the Consumer Financial Protection Bureau and filed suit against a pension advance company, alleging that the company violated state lending laws, took unfair advantage in other ways, when it had veterans and senior citizens sign their pension rights to the company in exchange for immediate, but highly-discounted, cash payments.

The Minnesota AG has sued Future Income Payments, LLC, which is the same company that is being sued by the CFPB over alleged violations of federal lending laws.

The Minnesota Attorney General has also sued another company, FIP, LLC, bringing similar allegations arising from the companies’ business that involve pension payment transactions.  In particular, the AG alleges that the two companies characterized the transactions as sales of future payments, when, in fact, the transactions were loans.  As loans, the annual interest rates exceeded 200%, according to the AG.  In addition, the state attorney general says that the companies were unlicensed.

In 2015, the CFPB sued pension advance companies, including Future Income Payments, alleging violations of federal lending laws.

News articles about the Minnesota AG’s lawsuit are available here (“Minnesota Sues Online Lenders For Targeting Vulnerable Pensioners“) and here (“Minnesota attorney general sues companies that allegedly bilked veterans and seniors“).

Another article (available here), from DisabledVeterans.Org, says of the veterans pension transactions that “these benefits cannot generally be assigned” and that “such agreements are likely unenforceable so long as the judge knows about the federal statutes precluding assignment of these federal benefits.”

Some earlier Secondary Insurance Market Blog posts about the CFPB lawsuit against Future Income Payments are here, here, and here.

 

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