Bill > S03666

This bill establishes a comprehensive regulatory framework for consumer litigation funding in New York, creating new requirements and protections for consumers who seek financial assistance while pursuing legal claims. The legislation defines consumer litigation funding as a non-recourse transaction where a funding company purchases a contingent right to receive a portion of potential legal settlement proceeds. Key provisions include mandating clear, easily understandable contracts with specific disclosure requirements, prohibiting funding companies from making decisions about legal claims or paying referral fees, and requiring funding companies to register with the state. The bill requires contracts to include a five-day right of rescission, detailed payment schedules, and explicit warnings about the financial terms. Funding companies must provide transparent information about charges and funded amounts, and cannot interfere with the legal process. The legislation also establishes registration requirements, including a $500 initial registration fee and a $200 renewal fee every two years, and requires annual reporting to the Department of Financial Services. The bill aims to protect consumers by ensuring fair practices, preventing predatory lending, and providing clear guidelines for litigation funding transactions. Notably, the law will take effect 180 days after becoming law and will not apply to litigation funding agreements made prior to its effective date.

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https://www.nysenate.gov/legislation/bills/2025/S3666