Last week, federal consumer watchdog, the Consumer Financial Protection Bureau (CFPB), announced that it had partnered with the New York Department of Financial Services (NYDFS) to bring charges against two pension advance companies. The complaint filed in the US District Court for the Central District of Columbia alleges that the two companies violated New York state law and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) by misrepresenting the nature of their pension advance loans as a sale and not a loan. The agencies also allege that the companies failed to disclose the interest rate and fees for the loans.
In a statement, CFPB Director Richard Cordray said, “These companies duped consumers into taking out pension advance loans by deceiving them about the terms of the deal.” Acting New York Superintendent of Financial Services, Anthony J. Albanese, said, “This scheme involved false advertising, illegal loans at high interest rates, and other abusive tactics that our Department simply will not tolerate. Together with the Consumer Financial Protection Bureau, we are seeking to deliver relief to the pensioners on whom the defendants preyed. We thank our partners at the CFPB for their outstanding work and cooperation in investigating and pursuing this matter, and the attorneys at the New York Attorney General’s Office for their representation of the Department in this matter.” The partnership between federal and state agencies allows government investigations to leverage additional resources and bring charges under both state and federal laws.
NYDFS Press Release:
CFPB Press Release: