Bill > HB1556

This bill, known as the Transparency in Consumer Legal Funding Act, aims to regulate consumer legal funding, which is a nonrecourse transaction where a company buys a portion of the potential proceeds from a consumer's legal claim. The act mandates that these contracts be written clearly, fully completed before signing, and include a ten-day right to cancel by returning the disbursed funds. It also requires specific disclosures about the funded amount, all charges (which include fees and interest), and the maximum amount a consumer could owe, emphasizing that repayment is only from the legal claim's proceeds unless the consumer commits fraud or breaches the contract. Attorneys involved must acknowledge they've explained the contract to the consumer and have no financial interest in the funding company, and they are prohibited from receiving referral fees. Consumer legal funding companies are barred from paying referral fees to attorneys or medical providers, advertising falsely, interfering with legal claim decisions, or colluding to encourage fabricated claims. The bill also requires these companies to register with the state, pay fees, and potentially post a bond, with penalties for violations including forfeiture of repayment and civil fines. Finally, it clarifies that these transactions are not loans and establishes disclosure requirements for legal claim participants and insurers regarding the existence of such funding.

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https://billstatus.ls.state.ms.us/2026/pdf/history/HB/HB1556.xml