by Structured Settlement Watchdog®
Heard amid the swirling "Pope-pourri" this week, a Washington soothsayer murmurs to the non-specific NASP lobbyist, "Beware the Ides of NASP". The reply "The Ides of NASP have come". To which the soothsayer responded "Aye NASP, it's because "cash now" has too frequently come and gone, that the Ides of the Tiger have come". The tiger in this case, is the United States Senate.
In a September 24, 2015 press release by the Senate, " a bipartisan group of U.S. Senators are calling on the nation’s foremost consumer and financial watchdogs to investigate an industry that may be preying on recipients of structured settlements, convincing them to trade decades of future payouts for an immediate lump sum payment worth a fraction of their value"
Following a disturbing report by Terry McCoy in The Washington Post, U.S. Senators Jack Reed (D-RI), Susan Collins (R-ME) and Sherrod Brown (D-OH) are urging the heads of the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Internal Revenue Service (IRS), and the Securities and Exchange Commission (SEC) to investigate these allegations and take steps to curb unscrupulous activities in the industry.
Here's what the bipartisan group of Senators thinks of the structured settlement factoring industry:
- Senator. Jack Reed "“I am concerned that a burgeoning industry of financial scammers is targeting vulnerable members of the community, such as lead poisoning victims, by buying their structured settlements for a fraction of their value, and then selling them off for a huge profit on the secondary market”
- Senator Sherrod Brown: "It is appalling that some companies are making big profits by preying on the most vulnerable Americans, including the elderly, people with disabilities, and children. Federal regulators need to crack down on shadowy companies that victimize consumers by offering fast cash in exchange for selling their structured settlements at a fraction of their value"
The Senators stated that they would appreciate responses from each of you to the following questions to the above listed agencies:
1. What existing authorities does your agency currently have with respect to factoring transactions?
2. What actions have been taken, to date, against purchasers of settlement rights who engage in abusive tactics? What further actions can your agency take?
3. To the extent you have jurisdiction over some aspect of factoring transactions, how does
your agency coordinate with other federal and state agencies that may also have jurisdiction?
4. Are there any legislative proposals that would be helpful to your agency in protecting
consumers in factoring transactions?
Here is my White Paper on the Structured Settlement Secondary Market that was published last week. It provides a background as well as a four critical actionable items that should be considered by legislators in the House and Senate, the relevant Federal agencies and state and local legislators.
Structured Settlement Secondary Market Serves a Need by Reckless Lack of Regulation Creates Problems in Need of Constructive Solutions. Download Darer Structured Settlement White Paper on Secondary Market Constructive Solutions 2015
Judging by my private discussions with several leaders in the structured settlement secondary market there has been a warming to a licensing standard, which is the first of the actionable items in the white paper. Why don't we build on that? Get rid of the "Vulture Culture" and set some real enforceable standards!
Here is the full Senate Press Release Download Senators Target Factoring Industry Abuses