Greed Has No Bounds
The NFL has agreed to a settlement with its former players who suffered cognitive impairment as a result of repetitive brain trauma. Depending upon the degree of impairment that can be proven, individual players will receive payouts that could reach into the millions. Many of the players are suffering from dementia and are down on their luck financially.
According to a story in The New York Times on May 9, 2016, at least six predatory lenders see these needy brain injured players as an opportunity to make money. The lenders are approaching players offering to lend money in advance of their receipt of money from the settlement. The catch is that the interest rates are 40% or higher! These rates make payday loan sharks seem tame.
The companies defend what they are doing by saying they are taking a big risk and providing a service to those who need money now and can’t wait.
On the other hand, as said by attorney Richard Adler, “It’s predatory, it’s one-sided and preys on people with brain injuries. You’re lending to someone who may not have the full legal capacity to understand what they are signing.”
Broke, desperate, and brain damaged. No legitimate lender thinks that is the profile of a good loan risk.
I should add that lenders utilizing this business model are not something new. They have been around for quite some time. You see their advertisements often on TV offering to make advances on settlements and offering to buy structured settlements. Another side of this shady industry are those companies offering to lend money to lawyers.
It is all very ugly and the public needs protection from predatory lending practices. However, the United States Congress and state legislators seem to have no appetite to rein in these vultures.