PENSION ADVANCES and DEPOSIT ADVANCES

By now, surely most people have heard of Payday Loans or Payday Advances; but, whatever you call them, they are loans, generally provided by check cashing stores or pawn shops. Interest rates are usurious and they often have features that can lock borrowers in for a long period of time, as noted in the linked Consumer Finance Protection Bureau bulletin, http://www.consumerfinance.gov/pressreleases/the-cfpb-finds-payday-and-deposit-advance-loans-can-trap-consumers-in-debt/.

The linked article, from the NY Times, http://www.nytimes.com/2013/04/28/business/economy/pension-loans-drive-retirees-into-more-debt.html?hp&pagewanted=print, describes “Pension Advances”, loans that are tied to pensions. Another variation of such loans, “Deposit Advances”, are offered by commercial banks (i.e. Wells Fargo, U.S. Bank, Fifth Third, and Regions, etc.), in the following NY Times article, http://bucks.blogs.nytimes.com/2012/02/08/some-big-banks-offer-payday-like-loans/?pagewanted=print. Be sure to note the interest rates cited in this Times article. Those are bank loans?

Remember that these loans are not providing any of your money in advance; rather, they are out-right loans, for which the borrower is being charged an exorbitant rate of interest–probably much higher than those on credit cards. Just like you don’t own your pay until you earn it, you are certainly not entitled to access pension funds until the proscribed date, or to take money out of a bank deposit account until it has the funds needed.

And, don’t let your guard down. When people hear the inclusion of certain words, such as pension or deposit, they think that it is a safe transaction. The only one of the three similar types of loans (Payday, Pension or Deposit Advance), which is subject to Government Regulation is the Deposit Advance, and the FDIC and Comptroller of the Currency might be considering placing certain restrictions on them, as noted in the linked bulletin from the CFPB, http://www.consumerfinance.gov/pressreleases/cfpb-statement-on-deposit-advance-product-announcements-by-banking-regulators/.

As I have noted before, there are many people in the Financial Services Industry who would be more than happy to separate you from your money. Keep your guard up!

Advertisements

,

  1. #1 by yankeeshopper.net on May 17, 2014 - 5:26 PM

    After going over a number of the blog articles on your blog, I really like your technique of
    blogging. I saved as a favorite it to my bookmark website list and will
    be checking back in the near future. Please check out my web site too and tell me
    what you think.

  2. #2 by google plus android on June 12, 2014 - 7:09 PM

    Fabulous, what a webpage it is! This weblog presents helpful data to us, keep it up.

  3. #3 by frazzling on June 26, 2014 - 7:37 AM

    Greetings! Very helpful advice within this post! It’s the little changes that produce the largest changes.

    Many thanks for sharing!

  4. #4 by cheekos on June 26, 2014 - 12:12 PM

    Dear Readers, I do not necessarily endorse any product that might be referenced on the Comments made. I try to delete ones that were outright attempts to market a product or service. This is often the case with Comments that are too full of…shall I say “praise”, don’t make sense or were with regard to very old Blog Posts.

  5. #5 by http://www.asianchat.biz on June 26, 2014 - 9:10 PM

    For mߋst up-to-date news you have to pay a quick
    visit internet andd on internet I fߋund this website as a most еxcellent
    sitе for hottest updates.

  6. #6 by Chiropractor on July 1, 2014 - 8:59 PM

    I must thank you forr the efforts you’ve put in writing this blog.
    I realkly hope to check out the same high-grade blog posts byy you in the future ass well.
    In truth, your creative writing abilities has motivated me to
    get my own, personal site now 😉

  7. #7 by http://www.veraojohn.webs.com on September 4, 2014 - 5:03 AM

    Highly energetic post, I loved that a lot. Will
    there be a part 2?

  8. #8 by cheekos on September 4, 2014 - 2:43 PM

    I do not anticipate a Part 2, since I hate to be repetitive. Readers can keep up-to-date on this issue by checking in with the Consumer Finance Protraction Bureau web site (www,cfpb.gov).

    One thing that I might add, however, is that, when it comes to your own money, you just cannot trust anyone. The Financial Services Industry–banks, brokerages, wealth managers, mutual funds, insurance companies, etc.–have been licking their chops in anticipation of the Baby Boomer Retirement Movement, which started a couple of years ago. 10,000 per day, for 17 more days.

    Bankers are generally relied on to be one of the most trustworthy professions. Also, many banks today have representatives of their brokerage subsidiary located in their bank offices. Many people merely assumed that everything in that office is Government-backed, WHICH COULD NOT BE FURTHER FROM THE TRUTH. Bankers, brokers, insurance agents–across-the-board–are all mostly, if not totally, compensated for generating revenue–namely SELLING! Service is not even rewarded. So, as I have written before, KEEP YOUR GUARD UP! PROTECT YOUR MONEY!

  9. #9 by Elissa on September 11, 2014 - 2:51 AM

    I really like what you guys are usually up too.
    Such clever work and exposure! Keep upp the fantastic works guys I’ve added you guys tto blogroll.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: