Minnesota Senate Bill SF4967

Minnesota 2023-2024 Regular Session

• Introduced: 3/14/24
• Refer: 3/14/24

Caption

Consumers in Crisis Protection Act

Impact

The act will enable consumers to access funding for personal and household expenses while their legal claims are pending. It stipulates that these funds should not be used for attorney fees or litigation-related expenses, preventing potential conflicts of interest and maintaining the attorney-client relationship. Additionally, it aims to protect consumers from predatory practices by requiring clear disclosures and prohibiting unfair charges or practices by funding companies. Registration requirements for these companies will be enforced, improving financial stability and consumer protection.

Summary

SF4967, known as the Consumers in Crisis Protection Act, aims to establish regulations governing consumer legal funding transactions in Minnesota. The bill seeks to fill a regulatory gap concerning consumer legal funding companies, which provide cash advances to individuals awaiting legal settlements. It defines the roles, responsibilities, and requirements for both consumers and funding companies, creating a framework to ensure transparency and fairness in transactions.

Contention

However, there may be contention surrounding aspects such as the regulatory burden placed on funding companies. Critics may argue that extensive registration and compliance requirements could restrict their operations and limit consumer access to needed funding. Proponents, however, assert that these regulations are necessary to safeguard against abusive practices that can exploit vulnerable consumers during times of financial distress.