New York’s top banking regulator has begun an investigation into pension advance firms, the lenders that woo retirees to sign over their monthly pension checks in return for cash, the New York Times DealBook blog reported yesterday. The regulator, the New York Department of Financial Services, sent subpoenas to 10 companies in the business yesterday. Federal and state authorities say that such advances are actually loans that require customers to sign over all or a portion of their monthly pension checks in exchange for a lump-sum payment. The high-cost loans, the authorities claim, threaten to erode the retirement savings of a growing number of older Americans, thrusting retirees deep into debt.
