The Louisiana House of Representatives is considering legislation — SB 299 — that, “creates the appearance of regulation, but really allows consumer lawsuit lenders to operate outside of Louisiana law,” according to an alert issued by the Louisiana Association of Business and Industry (LABI). This legislation is scheduled to be heard in the House tomorrow, Thursday, May 29.
This legislation would allow lawsuit lenders to skirt Louisiana Consumer Credit laws and Office of Financial Institution regulation. It would legitimize the industry under the façade of consumer protection.
Without meaningful regulation, lawsuit lending:
- takes advantage of vulnerable consumers by charging excessive interest rates as high as 200%;
- prolongs litigation and artificially inflates settlement values;
- and leverages the taxpayer-funded court system for private gain.
The legislation is mere “window dressing”, according to LABI. Passage of S.B. 299 would be a significant step backwards for Louisiana businesses, consumers and the judicial system by undoing existing regulations that cover brick-and-mortar lawsuit lenders located in the state.