The proposed changes would specifically impact the practices governing litigation financing agreements, providing safeguards for consumers. It aims to ensure that consumers entering into these agreements understand the total costs involved and the terms they are agreeing to, thus enhancing transparency. The requirements for documentation, including the necessity of a written, signed agreement with proper disclosures, are designed to prevent potential exploitation of consumers who may be in vulnerable positions due to pending legal claims.
Summary
House Bill 584 introduces regulations on litigation financing transactions in Texas, mandating that any agreement must be in writing and signed by the consumer, with certain specific disclosures included. The bill defines key terms such as 'consumer', 'litigation financing company', and 'litigation financing agreement', establishing a legal framework for these financial arrangements. The purpose of the bill is to provide consumers clarity and protection in transactions where they receive funds in anticipation of legal outcomes.
Contention
Key points of contention surrounding HB584 may arise from the legality and ethics of litigation financing itself. Advocates argue that the bill promotes necessary consumer protection measures, while critics may raise concerns about how stringent regulations could hinder access to funding for individuals who need financial assistance while awaiting legal resolutions. The balance between regulation and accessibility will be crucial in discussions regarding this legislation.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
Relating to amendments to the Uniform Commercial Code, including amendments concerning certain intangible assets and the perfection of security interests in those assets.