According to a post on the Times Union’s Capitol Confidential blog, the New York State Senate will review the practice of lawsuit lending.
On May 16, the Senate Consumer Protection Committee, with new chair Chris Jacobs, will hold a hearing in Albany on lawsuit lending. Sen. Robert Ortt, a Buffalo area Republican, who sponsors legislation creating oversight for the industry, is listed as the “co-sponsor” for the hearing.
The practice of lawsuit lending has come under fire for the exorbitant interest rates that are charged when a plaintiff wins a case, which can result in the aggrieved party handing over their entire case victory to the financier. The industry has been able to avoid the regulations imposed on traditional lenders because a plaintiff isn’t obligated to repay their loan if they don’t win the case.
“All we’re looking at is to come up with uniform standards and some type of oversight for an industry that is really the wild west,” Ortt said. He added that reputable firms in the sector don’t need to be worried about regulations.
This issue is a hot topic for the Lawsuit Reform Alliance of New York, which is committed to curbing the amount of litigation in the state. They allege that lawsuit lenders help encourage frivolous lawsuits.
Read the full post here.