Information Center

Bill would regulate pension advance schemes marketed to federal and military retirees

On October 23, 2013, Representative Matt Cartwright (D-PA) introduced H.R. 3310, the Annuity Safety and Security Under Reasonable Enforcement Act of 2013 (ASSURE Act). The bill would regulate pension advance loans and any pension-related product offered to military and federal retirees that limit the retiree’s ability to control payments from his or her own pension.

The ASSURE Act would apply only to businesses that market “pension-related products” to military or federal retirees. A pension-related product is a financial product or service that takes the pension into consideration when evaluating a consumer’s ability to repay a loan or extension of credit. This would include a pension advance scheme. Private-sector retirees and those who have worked in state and local government can also be targets for pension advance schemes. However, this bill does not apply to them.  

The bill:

• Directs the Consumer Financial Protection Bureau (CFPB) to write rules specifying that any pension-related agreement that limits a federal or military retiree’s ability to control the payments received from his or her own pension will be called a loan or extension of credit.
• Limits the annual interest rate for pension advance loans and similar products that limit a retiree’s ability to control the payments from his or her own pension to the federal funds rate plus six percent.
• Directs the CFPB to write rules requiring those selling and marketing “pension-related products” to federal or military retirees to disclose how those products may affect their pensions. 
• Directs the CFPB to study and report on financial products and services that target federal and military retirees.
• Specifies that any pension advance or similar agreement between an enlisted military retiree and another party will be considered an illegal assignment of benefits if the other party gains control over payments from the retiree’s pension. 
• Prevents federal retirees who receive pension payments from assigning those payments to another party, except for union dues and payments to employee organizations. 
• Gives federal and military retirees receiving pensions the right to sue in federal or state court any party receiving an illegal assignment of their benefits.

Read the Annuity Safety and Security Under Reasonable Enforcement Act of 2013