Legislation recently offered in the House seeks to build on protections for federal retirees and survivor beneficiaries in so-called pension advances.
The law already bars federal retirees (and military retirees) from “assigning” their payments to a third party. However, in some cases an alternate arrangement is created in which the retiree agrees to deposit the payments in a financial account controlled by the firm, according to the sponsors.
In effect, such transactions are loans that carry high interest rates, they said.
The measure would require additional disclosures regarding such arrangements, would cap interest rates, and create a private right of action to allow individuals to enforce their rights in court.