The Consumer Financial Protection Bureau this month sued a group of pension advance company over allegedly misleading practices.
The CFPB alleges that the companies violated the Consumer Financial Protection Act of 2010, 12 U.S.C. § 5536(a)(1)(B), by representing that their pension advances were not loans, were not subject to lending laws, and “were comparable in cost to, or cheaper than, credit card debt when, in actuality, the pension-advance products were loans, and were subject to interest rates that were substantially higher than credit card interest rates”, the CFPB announced.
The CFPB also allege in its complaint, filed in U.S. District Court in the Central District of California, that the companies violated the Truth in Lending Act (TILA), 15 U.S.C. § 1638(a)-(b), by failing to disclose a measure of the cost of credit, expressed as a yearly rate.
The CFPB lawsuit named the following defendants: Future Income Payments, LLC; Scott Kohn; FIP, LLC; BuySellAnnuity Inc.; Cash Flow Investment Partners LLC; Pension Advance LLC; Cash Flow Investment Partners East LLC; Cash Flow Investment Partners MidEast LLC; Lumpsum Pension Advance Atlantic LLC; Lumpsum Pension Advance Southeast LLC; Lumpsum Settlement West LLC; PAS California, LLC; PAS Great Lakes, LLC; PAS Northeast LLC; PAS Southwest LLC; Pension Advance Carolinas LLC; Pension Advance Midwest LLC; and Pension Loans South LLC.
News stories about the CFPB lawsuit include the following:
- CFPB sues Calif. pension advance firm targeted by state AGs, at American Banker, here;
- CFPB’s 1st Suit Under Mulvaney Targets Pension Advance Co., at Law360, here; and
- U.S. consumer regulator sues pension lender for misleading borrowers, by Reuters, here.