In the absence of any regulation, the multibillion-dollar lawsuit lending industry is booming in New York, with prominent third-party litigation funders establishing new branches across the state. 

Lawsuit lending can provide an essential funding stream for individuals who are unbanked or underbanked and in need of funds while they await the outcome of their case.  

But predatory lenders take advantage of those in need, charging sky-high interest rates of 100% or more and leaving borrowers with little to none of their financial settlements. Some borrowers even end up in debt. 

The unchecked rise in third-party litigation funding has also been shown to contribute to rising auto insurance premiums. New Yorkers already pay the second-highest average insurance premiums in the nation and can’t afford future increases.  

Commonsense reforms of the out-of-control lawsuit lending industry will establish an interest rate cap to protect borrowers while mandating transparency in the litigation process to expose conflicts of interest and preserve the integrity of our legal system.  

If Albany lawmakers are truly committed to consumer protection, they’ll ensure lawsuit lending reform passes before the 2024 session ends in June.  

Email your legislators today and let them know that lawsuit lending reform should be a top priority!