Senate Bill 176 Summary

• Enacts the Consumers in Crisis Protection Act regulating consumer legal funding companies that provide advance payments on pending legal claims, with transactions capped at $400,000 and funds limited to personal or household expenses only.

• Requires consumer legal funding companies to register with the Insurance Commissioner, pay a $1,000 non-refundable registration fee (renewed every 3 years), maintain a $50,000 surety bond, and submit to examinations for compliance.

• Limits charges to 18% of funded amount plus 3.5% servicing charge upon funding and at each six-month anniversary (capped at 36 months total), with a one-time $250 document preparation fee, and establishes nonrecourse obligations where consumers owe nothing if the legal claim recovers nothing.

• Requires consumer legal funding contracts to include plain language disclosures, 10-day rescission rights, attorney acknowledgments, and prohibits companies from influencing legal claims, paying referral fees, or collecting if net proceeds are insufficient.

• Expands definitions of "minority business" and "historically underutilized business" for public contracts to include Employee Stock Ownership Plan (ESOP) companies where at least 51% of stock is owned by minority persons or socially and economically disadvantaged individuals.