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.