Rep. Elijah E. Cummings said Monday that Democrats are expanding their investigation of companies that offer lump sum payments in exchange for monthly settlement checks awarded to people poisoned by lead paint.
The Baltimore Democrat and top-ranking Democrat on the House Oversight and Government Reform Committee sent letters to two companies seeking more information about the practice, Massachusetts-based Bulbrook/Drislane Brokerage and Oregon-based Somerset Wealth Strategies.
Experts have questioned how informed settlement sellers are about the transactions they are agreeing to. Sellers are required to receive independent financial counseling before signing an agreement, but in many cases the counseling sessions are perfunctory and are completed in less than a minute.
Cummings sent a similar letter to Chevy Chase-based Access Funding in August. That company purchased $146,000 worth of lead-paint settlement money awarded to Freddie Gray for around $18,300, according to a Washington Post investigation this year. Gray died April 19, one week after being arrested and suffering a severe spinal cord injury while in the back of a police transport van.
"Structured settlements are awarded to ensure that individuals who have suffered grievous injuries -- like children in Baltimore who have been exposed to lead paint -- are taken care of well into the future," Cummings said in a statement.
"I want to understand how private companies make profits buying and selling settlements that are meant to ensure victims have reliable incomes, and how we can best protect vulnerable individuals from predatory and abusive practices," he said.
The investigation is led by Democrats, who represent a minority on the committee.
In his letters, Cummings asked whether "secondary market annuities" are regulated under state law and what disclosures are made to purchasers. The Democrat also requested a list of structured settlements originally owned by Maryland residents that have been offered for sale by the companies.