Law360, New York (September 23, 2015, 11:15 AM ET)
On Aug. 20, 2015, the Consumer Financial Protection Bureau and New York Department of Financial Services filed suit in the U.S. District Court for the Central District of California against Pension Funding LLC and Pension Income LLC ("PF-PI or the companies") and three of the companies’ individual managers for deceiving consumers about the costs and risks of their pension advanced loans.
The companies provide cash advances in exchange for a portion or all of a consumer’s future pension payment. The complaint alleges that the defendants targeted retirees and military pensioners and otherwise deceptively marketed the products, illustrating the CFPB’s continued commitment to protecting these investors from predatory lending practices. While the complaint charges that the transactions in question constituted loans rather than asset purchases, it does not specify whether the pensioners had any liability in the event the pension payments were smaller than anticipated. The complaint states further, however, that the defendant companies purchased insurance against the risk of premature death (and cessation of pensions) of the pensioners.