Bill Text: IN HB1558 | 2013 | Regular Session | Amended
Bill Title: Consumer lawsuit lending.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2013-05-13 - Public Law 75 [HB1558 Detail]
Download: Indiana-2013-HB1558-Amended.html
Citations Affected: IC 24-4.5; IC 34-60.
Synopsis: Consumer lawsuit lending. Provides that a nonrecourse loan
secured only by the proceeds of a lawsuit is subject to the same
regulation as a traditional loan. Requires a plaintiff who has received
a nonrecourse loan secured by the proceeds of a lawsuit to file a copy
of the lending agreement with the court and provide a copy to the
opposing party.
Effective: July 1, 2013.
January 22, 2013, read first time and referred to Committee on Insurance.
February 14, 2013, amended, reported _ Do Pass.
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A BILL FOR AN ACT to amend the Indiana Code concerning civil
procedure.
(1) the creation of debt by the lender's payment of or agreement to pay money to the debtor or to a third party for the account of the debtor;
(2) the creation of debt by a credit to an account with the lender upon which the debtor is entitled to draw immediately;
(3) the creation of debt pursuant to a lender credit card or similar arrangement;
(4) the forbearance of debt arising from a loan; and
(5) a consumer lawsuit loan (as defined in IC 34-60-1-2(2)).
the following:
(a) A consumer lawsuit lender (as defined in IC 34-60-1-2(3)).
(b) An assignee of the lender's right to payment but use of the
term does not in itself impose on an assignee any obligation of the
lender with respect to events occurring before the assignment.
(2) A loan, refinancing, or consolidation is "precomputed" if the
debt is expressed as a sum comprising the principal and the amount of
the loan finance charge computed in advance.
(3) "Principal" of a loan means the total of:
(a) the net amount paid to, receivable by, or paid or payable for
the account of the debtor;
(b) the amount of any discount excluded from the loan finance
charge (subsection (2) of IC 24-4.5-3-109); and
(c) to the extent that payment is deferred:
(i) amounts actually paid or to be paid by the lender for
registration, certificate of title, or license fees if not included
in (a); and
(ii) additional charges permitted by this chapter
(IC 24-4.5-3-202).
(2) This chapter applies to:
(a) a lender or to any person who facilitates, enables, or acts as a conduit for any person who is or may be exempt from licensing under IC 24-4.5-3-502;
(b) a bank, savings association, credit union, or other state or federally regulated financial institution except those that are specifically exempt regarding limitations on interest rates and fees; or
(c) a person, if the department determines that a transaction is:
(i) in substance a disguised loan; or
(ii) the application of subterfuge for the purpose of avoiding this chapter.
(3) A loan that:
(a) does not qualify as a small loan under section 104 of this chapter;
(b) is for a term shorter than that specified in section 401(1) of this chapter; or
(c) is made in violation of section 201, 401, 402, 404, or 410 of
this chapter;
is subject to this article. The department may conform the finance
charge for a loan described in this subsection to the limitations set forth
in IC 24-4.5-3-508.
(4) This chapter does not apply to a consumer lawsuit loan (as
defined in IC 34-60-1-2(2)) or a consumer lawsuit lender (as
defined in IC 34-60-1-2(3)).
Chapter 8. Consumer Lawsuit Lending
Sec. 1. Notwithstanding any other provision of this article, other than IC 24-4.5-7-102, a consumer lawsuit loan (as defined in IC 34-60-1-2(2)), regardless of amount, is a loan subject to all provisions of this article that apply to a loan.
ARTICLE 60. CONSUMER LAWSUIT LOANS
Chapter 1. Consumer Lawsuit Lending
Sec. 1. This chapter applies to a consumer lawsuit loan entered into after June 30, 2013.
Sec. 2. The following definitions apply throughout this chapter:
(1) "Consumer" means an individual who is or may become a plaintiff in a proceeding.
(2) "Consumer lawsuit lending" or "consumer lawsuit loan" means:
(A) providing money to a consumer for any purpose other than prosecuting the consumer's proceeding, if the repayment of the money is:
(i) required only if the consumer prevails in the proceeding; and
(ii) sourced from the proceeds of the proceeding, by judgment, settlement, or otherwise; or
(B) purchasing from a consumer a contingent right to receive a share of the potential proceeds of the consumer's proceeding, by judgment, settlement, or otherwise.
(3) "Consumer lawsuit lender" means any person that engages in consumer lawsuit lending.
(4) "Proceeding" means:
(A) a civil action;
(B) mediation, arbitration, or any other alternative dispute
resolution proceeding; or
(C) an administrative proceeding before an agency or
instrumentality of the state.
Sec. 3. (a) If a consumer lawsuit lending agreement is executed
before the consumer files a complaint or similar pleading, the
consumer shall file a copy of the agreement with the tribunal when
the complaint or similar pleading is filed.
(b) If a consumer lawsuit lending agreement is executed after
the consumer files a complaint or similar pleading, the consumer
shall:
(1) file a copy of the agreement with the tribunal not later
than ten (10) days after the agreement is executed; and
(2) serve a copy of the agreement on the opposing party.
