As the slow climb out of the recession continues, many consumers are looking for immediate financial assistance. One of the products being offered to "help out" retirees is a pension-based loan or advance.
Typically, a retiree enters into a contract to receive a lump sum payment. In exchange, the retiree agrees that all or a portion of the pension payment he or she receives each month shall go to the lender.
If the retiree should pre-decease the end of the contract term, the remainder of the "debt" may be forgiven.
The Washington State Department of Financial Institutions (DFI) has determined that this sort of activity may constitute lending under the Consumer Loan Act.
DFI is actively seeking out individuals who have signed up for such pension-based loans and would like to identify entities offering this product to Washington retirees to ensure that the proper protections are being afforded our retirees.
If you are aware of entities offering or selling pension-based loans to Washington retirees, you are encouraged to report them to DFI.
If you are aware of Washington residents that have been sold pension-based loans, please encourage them to file a complaint with DFI through the online complaint system at www.dfi.wa.gov.