HB 2301 - Non-Recourse Civil Litigation Funding Act

• Establishes the Non-Recourse Civil Litigation Funding Act creating a licensing and regulatory framework for companies that provide non-recourse funding to consumers with pending legal claims in exchange for a portion of settlement/judgment proceeds.

• Requires civil litigation funding companies to be licensed by the Illinois Department of Financial and Professional Regulation, post a $50,000 bond, and pay annual fees of $1,000; applicants must submit a $1,500 non-refundable application fee and be current licensees under the Consumer Installment Loan Act.

• Mandates specific contract provisions including detailed disclosure charts showing funding amounts, fees, and annual percentage rates (capped at 36% plus up to 3% monthly deferment fee), 10-business-day cancellation rights, and prohibitions on percentage-based fees tied to recovery amounts.

• Prohibits funding companies from paying referral fees to attorneys or medical providers, entering into contracts involving pending class actions, engaging in unfair or deceptive practices, using confession of judgment clauses, or making decisions about case settlement.

• Establishes claim priorities requiring subrogation claims, attorney fees, and healthcare liens be satisfied before funding company claims; grants the Secretary authority to impose fines up to $10,000 per violation and suspend or revoke licenses for material violations.