Current State Legislation
- Four states—Maine, Nebraska, Ohio, and Oklahoma—have passed consumer-friendly legislation specific to the industry without imposing price controls, allowing the industry to continue to provide its vital service to consumers. In New York, the state Attorney General also agreed to consumer-friendly terms with the Consumer Legal Funding industry.
- In Tennessee in 2014, a bill passed that caused Consumer Legal Funding companies to stop offering their service to Tennesseans. Since leaving the state, one legal funding company, Oasis, has received thousands of calls from consumers seeking help. Consumer Legal Funding legislation is now being revisited as the state legislature reconvenes. Those thousands of consumers, as well as consumer-focused business leaders, are paying close attention.
- 2015 State Legislative Session
- In Arkansas, introduced legislation, SB 882, to restrict the rate companies can charge in the state. As a result Consumer Legal Funding companies have stopped doing business in the state.
- In Vermont, S 73, passed and as a result there is a one year moratorium on the industry from July 1, 2015 until July 1, 2016. The Attorney Generals office along with the Department of Financial Regulation are to develop regulations and guidelines on how to properly regulate the industry in the interim.
Who Opposes Consumer Legal Funding and Why?
Insurance companies have spent millions of dollars working with Washington lobbyists to try and eliminate legal funding. They have much to gain from a legal process that puts pressure on consumers to settle their claims for less than fair value. In fact, over the years, large insurance companies have institutionalized a method of increasing their profits by using complex computer programs to systematically underpay injury claims. Big insurance companies have every incentive to oppose a product like Consumer Legal Funding. They dislike that Consumer Legal Funding empowers consumers by providing them a way to stay afloat financially while they wait for a fair settlement.
What are Insurance Companies Doing to Try and Eliminate Consumer Legal Funding?
While the Consumer Legal Funding industry seeks fair state-level regulation that protects consumers and ensures a vital product is available, the insurance industry is spending millions of dollars lobbying for laws that would entirely eliminate Consumer Legal Funding. “Big Insurance” is trying to use the legislative process for its own self-serving purposes. It is pushing anti-free market government price controls and other “poison pill” provisions that will make Consumer Legal Funding impossible to deliver and thus impossible for consumers to access. Big insurance’s goal is to take a crucial option away from consumers in order to increase its profits.