The U.S. Chamber of Commerce wants nothing more then for the entire consumer legal funding industry to vanish from Illinois.  In the current session at the Illinois State House, the U.S. Chamber of Commerce is attempting to persuade legislators that price control regulations along with other regulations disguised as “consumer-friendly” measures are a must to rein in the consumer legal funding industry. Of course the ultimate goal for the Chamber is to somehow pass these regulations and wipe the consumer legal funding industry from existence in Illinois.  Passage of such measures would also kill hundreds of jobs and leave thousands of consumers without a financial resource that has become so vital to so many in Illinois.

For many years now, consumer legal funding has provided essential services to thousands of Illinois consumers.  Because of consumer legal funding, consumers in Illinois finally had a debt-free and non-recourse financial option that allowed them to pay for items such as rent, utilities, food and medical bills while they awaited their auto injury claim to be settled. It is residence like Lance from Franklin Park, Illinois who no longer had to worry about his family’s daily living expenses or have to settle for a less-then-fair amount on his claim.  Instead, he could fight for what he deserved, a fair settlement on his injury claim.

You see Lance was recently in an auto accident, at no fault of his own that left him injured and unable to work. After waiting months for his claim to be settled and with little to no money left in his savings account, Lance and his family needed help.  After exploring several financial options, Lance decided consumer legal funding was right for him.  After consulting his lawyer and looking over the fully disclosed terms of the agreement, Lance received an amount of money that would be sufficient enough to help him pay for rent, food, utilities and medical bills he incurred from the auto accident.

“We had bills to pay and couldn’t wait any longer for the auto injury case to be settled,” Lance said. Consumer legal funding relieved that stress.”

So why would the U.S. Chamber of Commerce seek regulations that would eliminate an industry so many have come to rely on? Killing hundreds of jobs in Illinois? And creating several new regulations, including a new price control law that would dictate how much a company can charge for its products?

It all comes down to the bottom lines of the now handful of mega corporations the U.S. Chamber of Commerce represents.  Long gone are the days of the U.S. Chamber representing the voice of all business, where its mission was to provide a vibrant job-creating atmosphere among small and large businesses alike.  Instead, they have begun to author and promote legislation in state capitals like Springfield to enact price control and job killing bills that will benefit the few at the expense of the many.

It is time for members in Springfield to stand up to the U.S. Chamber Of Commerce and help to preserve the vital services the consumer legal funding industry provides to hardworking citizens like Lance of Franklin Park, Illinois.

Back in the day the U.S. Chamber of Commerce was a true association for all businesses to join as one voice to advocate for free market principles against overreaching Government types who wanted to regulate businesses to their death.  Now the U.S. Chamber of Commerce is nothing more than a $200 Million a year lobby group for large banks and large insurance corporations hiding behind the mask of its past.  

In fact, it is the U.S. Chamber of Commerce who is actively shopping legislation all around the United States to implement devastating and almost death penalty like regulations on the consumer legal funding industry. 

No, pigs are not flying yet but the U.S. Chamber of Commerce is indeed pushing for anti-free market regulations against a business industry, disguising them as “consumer-friendly” and/or “legal reform” bills. 

The question should be then, if the consumer legal funding industry is under attack by the U.S. Chamber of Commerce, what business industry is next?

For many years now, consumer legal funding has provided vital services to millions of Americans.  Because of consumer legal funding, these consumers finally have an alternative to submitting to big insurance company’s delay tactics and low-ball settlement offers for injury claims.  Citizens no longer had to worry about their daily living expenses or be intimidated by billion-dollar insurance companies.  Instead they could fight for what they deserved, a fair settlement on their injury claim.

This business model does not sit well with insurance companies, and the U.S. Chamber of Commerce, whose Chairman of the Executive Committee just happens to also be the CEO of State Farm Insurance. Insurance corporations use a consumer’s accident and lack of financial security to force less-than-market-rate settlements. Relying on millions of data points as to the valuation of an injury, insurers have no incentive to settle quickly, except for well-below established injury values. Consumer legal funding bridges the financial gap from the time an accident occurs until a consumer has a chance to fairly settle their injury claim. This product gives consumers the strength to hang on in court proceedings or settlement negotiations despite having limited bargaining power against large insurance interests.

In a time where more and more businesses are under attack and more and more debilitating regulations are being applied to businesses across the country.  Its extremely disappointing to see the U.S. Chamber of Commerce construct such malicious and anti-free market pieces of legislation like they have done with regard to the consumer legal funding industry.

Where the “real” U.S. Chamber of Commerce would be the place the consumer legal funding industry could go for help.  The New U.S. Chamber of Commerce wants nothing to do with the everyday businessperson.  Instead, they have chosen to lobby for a few select industries, like the insurance conglomerates at the expense of all other businesses.    

My name is Dan Cleary, and I am the owner of Provident Litigation Funding, Inc., a pre-settlement funding company founded in Nashville in 1999 that has operated in Tennessee for almost 14 years. Should HB 1242 be passed into law tomorrow, I will have to close my doors and cease doing business the day the law goes into effect.

HB 1242 is a bill designed by big insurance, and it’s willing accomplice, the US Chamber of Commerce, to do one thing, and one thing only: to eliminate pre-settlement funding from being conducted in the state of Tennessee.

With regard to HB 1242, please be aware of the following:

1.   We have had no consumer complaints. This legislation is being brought by big insurance and is designed solely to protect insurance profits by taking us out of business. In all of the hours of I’ve spent on the hill, I have never once heard a representative of the other side voice anything regarding consumer protection. They are using the legislative process to further their own personal agenda.

2.   The rate cap puts us out of business. Due to the high cost of capital and the high loss rates we incur, pre-settlement funding companies, both large and small, are unable to operate under HB 1242. A rate structure that would allow us to stay in business was offered, but rejected by the sponsor.

3.   The prohibition of assignment puts us out of business. If we cannot assign the proceeds of our investment, we cannot obtain necessary financing.

 Besides the rate cap and inability to assign, there are other unusual, industry adverse features to this legislation generally not found in most business contracts:

 o   Most business contracts include a paragraph that stipulates if anerror does not materially change the nature of the contract, the contract is still enforceable. But HB 1242 stipulates that any error makes the agreement unenforceable by the purchaser; this standard does not require knowledge or intent.

 o   This bill stipulates that any and all liens are superior to a pre-settlement funding lien. This is highly unusual. We currently perfect many of our liens with the state of Tennessee under UCC law. This bill would preclude us from doing so.

o   There is also a bill that appears to prohibit buyouts. This eliminates the possibility that the consumer who finds a better deal, a lower rate, with another company cannot renegotiate the terms with another funding company to save money.

 If this bill passes, Santiago, an employee of mine, and a veteran from the 101^st Airborne at Ft. Campbell; and Kristi, my assistant, a middle aged woman whose family had earmarked her salary for the next four years to pay for her son’s college education will both lose their jobs.

 If this bill passes, thousands of Tennessee residents, like Teresa, who we advanced $2400 to yesterday to keep her car from being repossessed, thereby enabling her to take her two children under medical care to the doctor, will go without funding they cannot find elsewhere.

 Four states have considered and passed consumer protection bills to date: Maine, Nebraska, Oklahoma and Ohio.  These states managed to pass legislation that properly regulates the presettlement funding industry while allowing it to operate in profitably in their states, and there have subsequently been no issues in any of these four states.

 Why is it that Tennessee, a pro business state, is unable to do the same?  By marching in lock step with big insurance, the passage of HB 1242 will eliminate a service utilized by multiple thousands of your constituents over the last 14 years.

 Is HB 1242 really proper regulation? Is it consumer protection? Please vote no to HB 1242.

The Insurance industry and the U.S. Chamber of Commerce want you to believe Lawsuit lenders avoid most state oversight and regulations by categorizing their services as “investments” instead of “loans.”

The Facts Are:

Consumer Legal Funding is NOT a loan.  A loan has a guarantee of repayment, which a consumer legal funding agreement does not.  When no promise of repayment exists between a consumer legal funding company and a consumer, then the definition of the transaction cannot be considered a loan.  These funding agreements provide no promise that the amount of funds a consumer receives will be returned.  Instead, the funding agreement expressly acknowledges that the consumer legal funding company accepts the full risk of loss and understands they may never see that money again.  Characterizing this product as a loan and implementing price control regulations on consumer legal funding is merely an attempt by the insurance industry and the U.S. Chamber of Commerce to put the consumer legal funding industry out of business.  

If it were up to big insurance conglomerates like State Farm or D.C. advocacy groups like the U.S. Chamber of Commerce, the business of consumer legal funding would not exist in Tennessee.  In fact, there is legislation pending in the Tennessee legislature that would do just that, shut down the consumer legal funding industry for good in Tennessee.

When consumer legal funding began providing services in Tennessee, consumers finally had an alternative to cowering to big insurance company’s delay tactics and low-ball settlement offers for injury claims.  Hard working citizens like Conis from Goodlettsville, Tennessee or Benjie from Madisonville, Tennessee no longer had to agonize over their daily living expenses or be intimidated by billion-dollar insurance companies. Instead they could fight for what they deserved, a fair settlement on their injury claim.

For too long insurance companies in Tennessee and all across the United States have gotten away with less-then-market rate settlements with consumers for automobile injury claims.  Insurance companies, such as State Farm, use anti-consumer methods to delay claims just long enough that an injured consumer becomes financially desperate, cannot wait any longer for a payment claim, and end up taking a much lower settlement then what they actually deserve.  These trademark insurance company tactics prey on innocent working class citizens who are injured, unable to work and are without a paycheck.  

With consumer legal funding, consumers who have a pending injury claim can obtain non-recourse funding to help pay for everyday living expenses such as rent, utilities, transportation and food.  These small amounts of funding help alleviate the worries of the consumer’s daily financial lives and allows them to pursue a fair settlement for their injury claims with powerful insurance companies.

Consumer legal funding was critical in helping Conis and his family from Goodlettsville, Tennessee through some challenging times.  “[Consumer legal funding] helped a great deal.  If it weren’t for [consumer legal funding], we would be on the street.”

Benjie from Madisonville, Tennessee, simply said, “[Consumer legal funding] helped pay my bills.”  

Insurance companies, along with the U.S. Chamber of Commerce, whose chairman is conveniently the CEO of State Farm Insurance, will spend millions of dollars to tell a tall tale to consumers, legislators or anyone else who will listen that consumer legal funding is a product that is bad news for the consumer.  

These misleading campaigns by the insurance industry, through the U.S. Chamber of Commerce are, of course, false.   These are merely desperate diversions to their true intentions, of eliminating the consumer-friendly services of consumer legal funding in Tennessee in hopes of going back to their old ways of doing business. 

It is time for Tennessee legislators to tell the large out-of-state insurance companies and Washington, D.C. based advocacy groups NO, and instead stand up for working class Tennesseans like Conis and Benjie to preserve the services of consumer legal funding.