CFPB settles lawsuit against companies that brokered pension advance products structured as purchases
The CFPB and the South Carolina Department of Consumer Affairs (SCDCA) recently settled a lawsuit they filed jointly in a South Carolina federal district court in October 2019 against Performance Arbitrage Company, Inc. and Life Funding Options, Inc., and their individual owner that alleged the defendants violated the Consumer Financial Protection Act and the South Carolina Consumer Protection Code by brokering high-interest loans to consumers that were marketed as purchases of the consumers’ future pension or disability payments. The CFPB and SCDCA alleged that the majority of the transactions involved veterans with federal disability pensions or other pensions issued to veterans. They also alleged that the defendants assessed the creditworthiness of consumers before entering into the transactions and allowed consumers to repay the contracts from sources other than the contracted-for income streams.
Source: Alan S. Kaplinsky LexBlog December 18, 2020 read the Stipulated Judgment and Order