The Oklahoma House of Representatives passed a bill (SB 1016) Wednesday to curb lawsuit lending abuses that will now head to Governor Mary Fallin for her signature.
Consumer lawsuit lenders seek out plaintiffs and offer them “up front” cash to cover immediate living or medical expenses while they are engaged in a lawsuit. These loans, which are provided at sky-high interest rates of often over 100%, are then paid back to the lender from any settlement or judgment award the plaintiff may later receive.
Lawsuit lending is a serious problem: it diminishes recoveries for injured consumers, increases litigation costs, and crowds court dockets. In addition, if left unchecked, lawsuit lending threatens to erode client control over lawsuits and diminish the professional independence of attorneys.
Oklahoma would be the first state nationally to pass a law to protect consumers and curb abuses by bringing lawsuit lending into alignment with existing state law. SB 1016 would bring lawsuit lenders under the Uniform Consumer Credit Code so that they must simply play by the same rules as others that loan money in the state.
State Senator Brian Crain and State Representative Leslie Osborn deserve to be commended for working to advance SB 1016, and we urge Governor Fallin to swiftly sign it into to law to curb lawsuit lending abuses in Oklahoma. We are also hopeful that other states will follow Oklahoma’s lead.