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Sponsors
Senator · Senate District 62
1 Co-sponsor
History
- Referred to ways and means
- Delivered to assembly
- Passed senate
- Ordered to third reading cal.2013
- Committee discharged and committed to rules
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Relates to third party litigation financing
Assembly Floor Calendar · Sponsor Michael Simanowitz
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to third party litigation financing
Purpose or general idea of bill
The bill establishes specific guidelines and provisions to regulate the third party litigation financing industry in New York State
Summary of provisions
Section 1 amends the general business law by adding a new article (39-H). The first part of this section, 899-ccc, establishes definitions in relation to third party litigation financing and the regulation of this industry. Section 899-ddd sets forth contract requirements for third party litigation financing companies. Section 899-eee sets forth prohibitions for third party litigation financing companies and all parties involved in funded cases. Section 899-fff sets forth registration requirements for third party litigation financing companies to legally practice in New York State by registering with the department of financial services. Section 899-ggg establishes penalties for violating any provisions of this article.
Justification
Third Party Litigation financing emerged as an industry in the US in the 1990s. Companies only collect repayments in the event of an award or settlement. However, as there is no recourse if the claimant loses the suit, regular lending and collection caps do not apply to these financing companies. As a result, collected fees have the potential to reach outrageous and even usurious rates.
The industry is currently unregulated, exposing potential clients to risk. This legislation instructs companies to register with the Department of State, which will have discretionary regulation over the industry. Additionally, it mandates financing companies to disclose their fee structure and repayment terms, better educating consumers to the terms of their contract and provides means of recourse against unscrupulous practices. Furthermore, this legislation subjects these companies to abide by the maximum interest rates on loans put forth by existing statute. This bill also sets guidelines to eliminate potential conflicts of interest in the industry and establish penalties for companies found in violation of these provisions.
Fiscal implications
None
Legislative history
This is a new bill
Effective date
This act shall take effect on the 180th day.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.