Bill > H7751

This bill amends state law to ensure that agreements where companies provide money to individuals involved in lawsuits, known as litigation lending agreements (LLAs), are subject to the state's usury laws, which cap the maximum interest rates that can be charged on loans. The bill defines an LLA as any contract where money is given to a litigant in exchange for repayment from the proceeds of their lawsuit, excluding expenses advanced by attorneys for their clients. The key provision states that any amount repaid by a litigant that exceeds the amount they received under an LLA will be considered interest on a loan, regardless of how the agreement is labeled (e.g., loan, advance, investment), what the repayment terms are called (e.g., interest, use fees), or whether the repayment is contingent on winning the lawsuit. This change is intended to address concerns that some LLAs charge extremely high effective annual interest rates, sometimes exceeding 100%, which the legislature finds detrimental to citizens. The act takes effect immediately upon passage.