The following article was written by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC).
Illinois becomes the latest state to bring proper regulation to the consumer legal finance industry with the signing of SB 1099.
The Alliance for Responsible Consumer Legal Funding, a leading trade association for companies that provide consumer legal funding, was proud to work with Illinois Senator Jackie Collins and Representative Curtis Tarver in drafting and passing this law project. Additional sponsorship was offered by Senators John Collins, Mike Simmons, Mattie Hunter and Ann Gillespie as well as Representatives Elizabeth Hernandez and Jay Hoffman.
The legislation was also backed by the Woodstock Institute, Illinois’ leading consumer advocacy organization. SB 1099 provides some of the strongest consumer protections in the nation involving consumer legal financing.
It prohibits companies from:
- Pay or offer a commission or referral fee
- Accept a commission or referral fee
- Make false or misleading statements in advertising
- Take any decision in the legal claim of consumers
- Knowingly paying or offering to pay court costs, filing costs or attorney’s fees
- Provide legal advice to the consumer regarding financing or the underlying legal claim
- Lawyers representing the consumer are prohibited from having a financial interest in the finance company
It also requires companies that will offer this product to be registered with the Illinois Department of Financial and Professional Regulation, pass a background check, and post a bond.
Illinois will be the first state to require companies that provide consumer legal financing to Illinois residents to inform them about financial counseling programs.
“I personally want to thank Senator Collins and Representative Tarver for their dedicated efforts to pass this important bill.” said Eric Schuller, president of the Alliance for Responsible Consumer Legal Funding, They were not swayed by opponents of the legislation and ensured that this product could be offered to Illinois consumers in a fair and responsible.
Illinois joins Maine, Ohio, Nebraska, Oklahoma, Indiana, Vermont, Tennessee, Nevada and Utah in bringing proper regulation to the industry.
Brian Garelli, President of Preferred Capital Funding, said, “I want to thank Governor Pritzker and the Illinois Legislature for enacting SB 1099 in Illinois. The bill added more than a dozen consumer protections. It also levels the playing field between multi-billion dollar insurance companies and injury victims who otherwise might not be able to expect a fair settlement while their case progresses through the courts.
The law takes effect immediately.
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