New York State lawmakers are considering three bills to regulate the lawsuit lending industry after a series of scandals in the state, Legal Newsline reports.
The lawsuit lending industry has been the subject of intense media scrutiny after reports in the New York Times and New York Post. Some of the stories uncovered arrangements in which lawsuit lenders, who front cash advances with sky-high interest rates to plaintiffs in return for a cut of the settlement or judgment, worked with lawyers to find and coerce potential plaintiffs to have medical procedures that some doctors considered unnecessary.
Two of the bills, one in the state’s Senate and the other in the Assembly, would cap interest rates and regulate lawsuit lending arrangements like standard loans rather than investments. The executive director of the National Association of Consumer Advocates said the industry takes “advantage of people who are desperate, are hurt and have not sufficient funds to get by.”