Fact Check: Lawsuit Settlement Loans Regulations

Reclamación: These arrangements are not subject to the type of targeted laws and regulations which provide consumer protections for mortgages, automobile loans, and other individual borrowing.

Claimed By: Investopedia

Fact Check: Pre-settlement funding companies are subject to additional state government agency regulation and oversight in about ten states. These laws are consumer protections, as is the case for other regulated financial products.

The exact nature of the laws goes from state to state. Several states, such as Oklahoma, have laws that target, regulate, and define consumer legal funding as a unique non-loan product.

Other states regulate the product as actual loans, such as in Missouri.

The Missouri Division of Finance requires companies to be licensed and regulated with the divisions’ oversight in order to legally provide loans to Missouri residents borrowing money to be repaid at the end of their claim.

The fact is that even though most states do not regulate pre-settlement funding as a unique product that requires licensing and extra oversight, many do, which makes Investopedia’s claim mostly untrue.

Fact Check By: Express Legal Funding