Colorado 2023 Regular Session

Colorado House Bill HB1162 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	First Regular Session
	2	+	Seventy-fourth General Assembly
	3	+	STATE OF COLORADO
	4	+	REREVISED
	5	+	This Version Includes All Amendments
	6	+	Adopted in the Second House
	7	+	LLS NO. 23-0703.01 Christopher McMichael x4775
1	8		HOUSE BILL 23-1162
2		-	BY REPRESENTATIVE(S) Woodrow, Boesenecker, Brown, Epps, Jodeh,
3		-	Lindsay, Parenti, Sharbini, Sirota, Titone, Valdez;
4		-	also SENATOR(S) Rodriguez, Buckner, Cutter, Exum, Priola, Winter F.
	9	+	House Committees Senate Committees
	10	+	Business Affairs & Labor Business, Labor, & Technology
	11	+	Finance
	12	+	A BILL FOR AN ACT
5	13		C
6		-	ONCERNING THE REGULATION OF CONSUMER LEGAL FUNDING
7		-	TRANSACTIONS
8		-	, AND, IN CONNECTION THEREWITH, AUTHORIZING THE
9		-	ADMINISTRATOR OF THE
10		-	"UNIFORM CONSUMER CREDIT CODE" TO
11		-	ADOPT RULES REGULATING CREDITOR
12		-	-IMPOSED CHARGES FOR
13		-	CERTAIN CONSUMER CREDIT TRANSACTIONS THAT ARE SECURED BY
14		-	A CONSUMER
15		-	'S POTENTIAL PROCEEDS FROM A SETTLEMENT OR
16		-	JUDGMENT OBTAINED IN AN ASSOCIATED LEGAL CLAIM
17		-	.
18		-
19		-	Be it enacted by the General Assembly of the State of Colorado:
20		-	SECTION 1. In Colorado Revised Statutes, 5-2-204, add (6) as
21		-	follows:
22		-	5-2-204. Deferral charges - rules. (6) T
23		-	HE ADMINISTRATOR MAY
24		-	ADOPT RULES REGARDING DEFERRAL CHARGES FOR NONRECOURSE
25		-	CONSUMER CREDIT TRANSACTIONS THAT HAVE NO PERIODIC PAYMENTS AND
26		-	ARE SECURED BY AN UNVESTED
27		-	, CONTINGENT FUTURE INTEREST IN THE
28		-	POTENTIAL NET PROCEEDS OF A SETTLEMENT OR JUDGMENT OBTAINED FROM
29		-	NOTE: This bill has been prepared for the signatures of the appropriate legislative
30		-	officers and the Governor. To determine whether the Governor has signed the bill
31		-	or taken other action on it, please consult the legislative status sheet, the legislative
32		-	history, or the Session Laws.
33		-	________
34		-	Capital letters or bold & italic numbers indicate new material added to existing law; dashes
35		-	through words or numbers indicate deletions from existing law and such material is not part of
36		-	the act. THE CONSUMER'S ASSOCIATED LEGAL CLAIM.
37		-	SECTION 2. Act subject to petition - effective date. This act
38		-	takes effect at 12:01 a.m. on the day following the expiration of the
39		-	ninety-day period after final adjournment of the general assembly; except
40		-	that, if a referendum petition is filed pursuant to section 1 (3) of article V
41		-	of the state constitution against this act or an item, section, or part of this act
42		-	within such period, then the act, item, section, or part will not take effect
43		-	unless approved by the people at the general election to be held in
44		-	PAGE 2-HOUSE BILL 23-1162 November 2024 and, in such case, will take effect on the date of the official
45		-	declaration of the vote thereon by the governor.
46		-	____________________________ ____________________________
47		-	Julie McCluskie Steve Fenberg
48		-	SPEAKER OF THE HOUSE PRESIDENT OF
49		-	OF REPRESENTATIVES THE SENATE
50		-	____________________________ ____________________________
51		-	Robin Jones Cindi L. Markwell
52		-	CHIEF CLERK OF THE HOUSE SECRETARY OF
53		-	OF REPRESENTATIVES THE SENATE
54		-	APPROVED________________________________________
55		-	(Date and Time)
56		-	_________________________________________
57		-	Jared S. Polis
58		-	GOVERNOR OF THE STATE OF COLORADO
59		-	PAGE 3-HOUSE BILL 23-1162
	14	+	ONCERNING THE REGULATION OF CONSUMER LEGAL FUNDING101
	15	+	TRANSACTIONS , AND, IN CONNECTION THEREWITH ,102
	16	+	AUTHORIZING THE ADMINISTRATOR OF THE "UNIFORM103
	17	+	CONSUMER CREDIT CODE" TO ADOPT RULES REGULATING104
	18	+	CREDITOR-IMPOSED CHARGES FOR CERTAIN CONSUMER CREDIT105
	19	+	TRANSACTIONS THAT ARE SECURED BY A CONSUMER 'S106
	20	+	POTENTIAL PROCEEDS FROM A SETTLEMENT OR JUDGMENT107
	21	+	OBTAINED IN AN ASSOCIATED LEGAL CLAIM .108
	22	+	Bill Summary
	23	+	(Note: This summary applies to this bill as introduced and does
	24	+	not reflect any amendments that may be subsequently adopted. If this bill
	25	+	passes third reading in the house of introduction, a bill summary that
	26	+	applies to the reengrossed version of this bill will be available at
	27	+	SENATE
	28	+	3rd Reading Unamended
	29	+	May 1, 2023
	30	+	SENATE
	31	+	2nd Reading Unamended
	32	+	April 28, 2023
	33	+	HOUSE
	34	+	3rd Reading Unamended
	35	+	April 18, 2023
	36	+	HOUSE
	37	+	Amended 2nd Reading
	38	+	April 17, 2023
	39	+	HOUSE SPONSORSHIP
	40	+	Woodrow, Boesenecker, Brown, Epps, Jodeh, Lindsay, Parenti, Sharbini, Sirota, Titone,
	41	+	Valdez
	42	+	SENATE SPONSORSHIP
	43	+	Rodriguez, Buckner, Cutter, Exum, Priola, Winter F.
	44	+	Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
	45	+	Capital letters or bold & italic numbers indicate new material to be added to existing law.
	46	+	Dashes through the words or numbers indicate deletions from existing law. http://leg.colorado.gov.)
	47	+	The bill establishes the "Colorado Consumer Legal Funding Act"
	48	+	(act). A consumer legal funding transaction occurs when a consumer legal
	49	+	funding company (company) purchases, for an amount not to exceed
	50	+	$500,000, an interest in an individual's (consumer) associated legal claim.
	51	+	The money provided by the company must be repaid from the proceeds,
	52	+	if any, resulting from the settlement or judgment of the consumer's
	53	+	associated legal claim. The company may also receive a funding fee as
	54	+	part of the contract. The funding fee may not exceed 36% of the funded
	55	+	amount. The money provided to a consumer is meant to cover living
	56	+	expenses while the consumer awaits resolution of the associated legal
	57	+	claim.
	58	+	The bill provides the requirements for a consumer legal funding
	59	+	contract. A consumer legal funding contract is satisfied when a
	60	+	consumer's associated legal claim has been resolved or settled. The
	61	+	consumer must pay the company a predetermined amount, as specified in
	62	+	the contract, and the amount may not be calculated as a percentage of the
	63	+	judgment or settlement. The consumer is not required to repay the
	64	+	company if the consumer does not prevail on or settle the consumer's
	65	+	associated legal claim. The bill also details disclosures that are required
	66	+	as part of a consumer legal funding contract.
	67	+	The bill prohibits certain actions of consumer legal funding
	68	+	companies and describes how these companies are regulated by the
	69	+	attorney general's office, including registration requirements and
	70	+	associated registration fees and surcharges. The registration fees are
	71	+	credited to a new consumer legal funding cash fund and used to pay the
	72	+	attorney general's costs to implement and administer the bill. The
	73	+	surcharges are credited to the Colorado identity theft and financial fraud
	74	+	cash fund for use in enforcing the "Identity Theft and Financial Fraud
	75	+	Deterrence Act".
	76	+	The attorney general may fine a company, suspend or revoke a
	77	+	company's license, or prohibit a company from recovering funding fees
	78	+	for violating the bill.
	79	+	Be it enacted by the General Assembly of the State of Colorado:1
	80	+	SECTION 1. In Colorado Revised Statutes, 5-2-204, add (6) as2
	81	+	follows:3
	82	+	5-2-204. Deferral charges - rules. (6) THE ADMINISTRATOR MAY4
	83	+	ADOPT RULES REGARDING DEFERRAL CHARGES FOR NONRECOURSE5
	84	+	1162-2- CONSUMER CREDIT TRANSACTIONS THAT HAVE NO PERIODIC PAYMENTS1
	85	+	AND ARE SECURED BY AN UNVESTED, CONTINGENT FUTURE INTEREST IN2
	86	+	THE POTENTIAL NET PROCEEDS OF A SETTLEMENT OR J UDGMENT OBTAINED3
	87	+	FROM THE CONSUMER'S ASSOCIATED LEGAL CLAIM.4
	88	+	SECTION 2. Act subject to petition - effective date. This act5
	89	+	takes effect at 12:01 a.m. on the day following the expiration of the6
	90	+	ninety-day period after final adjournment of the general assembly; except7
	91	+	that, if a referendum petition is filed pursuant to section 1 (3) of article V8
	92	+	of the state constitution against this act or an item, section, or part of this9
	93	+	act within such period, then the act, item, section, or part will not take10
	94	+	effect unless approved by the people at the general election to be held in11
	95	+	November 2024 and, in such case, will take effect on the date of the12
	96	+	official declaration of the vote thereon by the governor.13
	97	+	1162
	98	+	-3-