SB1016 Summary - Consumer Litigation Funding Agreements

• Establishes licensing requirements for consumer litigation funders through the Administrator of Consumer Credit, with an application fee of $290.00 and bond requirements up to $50,000.

• Requires written funding agreements that must include specific disclosures in 12-point bold type, payment schedules based on predetermined intervals (not percentage of recovery), and a five-business-day right of rescission for consumers.

• Prohibits funders from paying referral fees to attorneys or medical providers, advertising false information, making settlement decisions, or paying court costs and attorney fees from funding proceeds.

• Exempts attorneys with existing client relationships, accountants providing services, and immediate family members from licensing and agreement requirements.

• Provides that unaffiliated attorneys are not obligated to assign settlement payments to funders unless they agree in writing, and grants funders only the funded amount if they violate the act or lack proper licensing.