Nearly one year ago, the U.S. Chamber of Commerce supported consumer legal funding legislation in Oklahoma that wisely did not include anti-free market price controls. Instead the bill, which became law, allowed for the free markets to dictate how a consumer legal funding company would price their products and services.
Fast forward to today in Tennessee. Why has the U.S. Chamber flip-flopped and decided that punishing price controls is key to regulating the consumer legal funding industry?
The fact of the matter is that the U.S. Chamber and the national insurance conglomerates that call the shots back at the headquarters in DC sense an opportunity to gain a competitive business advantage through the promotion of an anti-competitive regulatory regime that will force consumer legal funding companies to leave the Volunteer state.
Large insurance companies see consumer legal funding as a huge threat to their own bottom lines. The consumer legal funding business impacts the way large insurance companies prefer to deal with automobile claims. A typical strategy for a large insurance company, such as State Farm, is to utilize long delay tactics against a claim. Usually dragging settlements on as long as possible, in hopes the claimant becomes desperate enough to settle for pennies to what should actually owed.
Consumer legal funding on the other hand helps consumers work toward a fair settlement against insurance companies by allowing access to small amounts of funding to help pay for essential daily needs while weathering an insurance companies’ long delay tactics for settlement. These consumers, through no fault of their own, have likely been injured in an automobile accident, are unable to work and are without a paycheck. Consumer legal funding provides these small amounts of funding to help the consumer pay for things such as utility bills, transportation, housing and food while they wait for their settlement to be heard and finalized.
It is unfortunate that the U.S. Chamber of Commerce and big insurance conglomerates continue to deceive state legislators about the consumer legal funding industry. Especially since the consumer legal funding industry stands ready to work with all legislators to create sound policies that will truly help protect all consumers, while still providing access to the much needed services of the consumer legal funding industry.
The intentions of the U.S. Chamber and the insurance industry have never been more transparent than what they are trying to accomplish in Tennessee. Their push to eliminate the consumer legal funding industry through anti free-market price controls is a disservice to the consumers who rely upon the consumer legal funding industry every day. We are confident Tennessee policymakers will see these maneuvers for what they are and reject these anti-competitive price controls.