New legislation to provide oversight of companies that offer loan advances on pensions for veterans, seniors and other individuals in New York is being sponsored by Assemblywoman Addie J. Russell (D-Theresa).

Russell represents all St. Lawrence County towns along the St. Lawrence River plus Canton, Potsdam, Rossie, Macomb, DePeyster and northern Jefferson County.

The legislation is aimed at businesses that often engage in deceptive or predatory lending practices that target veterans and seniors who have pensions, a press release from the assemblywoman’s office said.

“Predatory lending is a repulsive and unethical business practice that unfortunately has been on the rise,” said Russell. “This legislation provides the oversight necessary to ensure our veterans and seniors are not taken advantage of by unscrupulous lenders looking to make a quick buck.”

Russell said that pension-advance companies target individuals who are in need of cash but have been turned away by banks. These companies, which are not subject to state or federal banking regulations, often advertise directly to veterans, seniors or other vulnerable populations, who are encouraged to sign over their pension checks in exchange for lump sums of cash. In reality, these advances come with outrageously high interest rates, ranging from 27 percent to 106 percent, which trap the recipient in a cycle of long-term debt, Russell said.

“Being from a community with large numbers of veterans and seniors, doing right by them is a responsibility I take very seriously,” said Russell. “We cannot sit back and do nothing while these companies capitalize on their economic hardships.”

The bill would authorize the New York State Department of Financial Services to publicly evaluate pension-advance companies and make any needed recommendations regarding their licensure and the fees and interest rates they charge. It would also direct the department to examine these companies’ disclosure practices.

Pension-advance companies became increasingly common following the 2008 financial crisis, when many retirees lost significant portions of their investments and turned to pension advances to pay their bills, according to Russell. At the same time, the combined debt held by Americans between the ages of 65 and 74 years old is rising faster than the debt held by any other age group. Among households led by individuals above the age of 65, debt levels have increased more than 50 percent from 2000 through 2011.