WASHINGTON — Congressional Democrats led by Rep. Elijah E. Cummings are questioning a Chevy Chase company that offers lump sum payments in exchange for monthly settlement checks awarded to people poisoned by lead paint.
Cummings, the top Democrat on the House Oversight and Government Reform Committee, said he is investigating the practice, in which companies purchase the settlements for far less than their long-term value. The Baltimore lawmaker released a letter Thursday in which he calls for a meeting with the CEO of Access Funding, Michael Borkowski.
The company was named in a Washington Post article this week that highlighted the unregulated industry. The Post noted that Access Funding had purchased $146,000 worth of lead-paint settlement money awarded to Freddie Gray for around $18,300.
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.
"We are investigating the structured settlement purchase industry to examine how companies purchase payment streams from settlement recipients for a lump-sum payment upfront, as well as the adequacy of existing legal protections for settlement recipients," Cummings wrote in the letter.
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.
"I am troubled by these allegations because it appears that American families -- many of whom are African Americans who have been subjected to devastating lead poisoning -- are now being targeted for their financial settlements," Cummings said in a statement.
"I want to understand not only how this company has been engaging in these practices, but also whether broader reforms are necessary to protect vulnerable families from dishonest financial predators."