Pension advance company settles with Pa. officials

Pennsylvania officials have reached an agreement with a pension advance company targeted by regulators in several states for charging exorbitant interest rates on hundreds of loans and doing business without a license.

The settlement disclosed Thursday by the state Department of Banking and Securities, applies to loans of less than $35,000 made by Irvine, Calif.-based Future Income Payments.

The company agreed to recalculate the amount that borrowers owe by lowering interest rates on the loans to 6 percent and excluding a $300 fee customers paid to get the advance.

Customers who have already repaid more than the recalculated amount will receive refunds. Monthly payments will be lowered for those who have not repaid the recalculated amount.

Future Income Payments did business with 309 Pennsylvania residents since 2011, the agency said. The borrowers turned over a portion of their future monthly pension checks in return for a lump sum cash advance of less than $35,000.

Customers included a Fayette County resident who had to repay $27,900 after borrowing $3,500 and a Lancaster County woman required to repay $116,400 after borrowing $12,000.

Regulators in Washington, Iowa, Minnesota and other states made similar allegations against Future Income Payments. They accused the company of charging interest rates as high as 240 percent.

Virginia Attorney General Mark Herring sued the company in March, accusing it of

charging as much as 183 percent interest on 950 illegal loans made to 650 pensioners in that state.

The agreement with Pennsylvania officials requires the company to make restitution within 30 days, to direct credit reporting agencies to remove any negative reports that Future Income Payments filed against borrowers, and to provide the state with detailed information on loans made to state residents.

Separately, two former employees of a Future Income Payments office near Detroit that processed loan applications said they are asking Michigan officials to help them collect wages the company failed to pay them after it suddenly closed the office this year. More than 100 were laid off without warning, the ex-employees said.