Bill > AB743

This bill would regulate lawsuit financing in California by requiring anyone engaged in the business of providing lawsuit financing to obtain a license from the Commissioner of Financial Protection and Innovation. Specifically, the bill defines lawsuit financing as a transaction where a person provides money or services in exchange for a contingent right to receive proceeds from a potential legal judgment or settlement. The legislation mandates that lawsuit financiers maintain a minimum surety bond of $250,000, which can be increased by the commissioner based on the volume of lawsuit financing originated. The bill also includes lawsuit financing within the definition of "commercial loans" and adds lawsuit financiers to the categories of businesses regulated under the California Financing Law. The bill provides context for this regulation by citing concerns about the lawsuit financing industry, including potential involvement of foreign entities like Russian oligarchs and international criminal organizations. Additionally, the bill establishes significant penalties for willful violations, with civil penalties ranging from $100,000 for a first violation to $250,000 for repeat violations. The overall goal is to bring transparency, accountability, and oversight to the lawsuit financing industry in California by ensuring that only financially responsible and law-abiding financiers can operate in the state.

Budget and Finance, Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB743