House committee substitute to the 2nd edition makes the following changes.

Recodifies the Consumers in Crisis Protection Act (Act) to GS Chapter 66 (was, Chapter 58) and changes its Article number in that Chapter to Article 53 (was, Article 94). Updates the Act’s statutory citations to reflect the new codification. Removes references to the Insurance Commissioner throughout.

Modifies the term consumer legal funding transaction to include transactions where the consumer sells the specified legal interest in a monetary settlement or judgment to use the proceeds for family use. Modifies legal claim to include claims that may be filed in the described courts. Removes valid healthcare provider liens as cost paid by the consumer that is deducted from the specified recovery in the term net proceeds.

Removes provisions requiring a consumer legal funding company to register with the Insurance Commissioner (GS 58-94-20), along with the registration application (GS 58-94-25). Now requires a consumer legal funding company to receive a certificate of authority from the Secretary of State (SOS) to conduct business in the State or other evidence of the applicant's registration or qualification to do business in the State. Removes requirement that a consumer legal funding company file a copy of it’s a template of its funding contract.  Now requires that all such funding be formalized and presented in a written contact. Provides that a consumer legal funding contract that intentionally violates GS 66-530 (the required content of such contracts) is null and void, and no person has a right to collect, attempt to collect, receive, or retain any funded amount or charges related to the consumer legal funding. Makes conforming changes.

Modifies the prohibition on a consumer legal funding company selling the legal funding contract to also exempt those instances where the company’s affiliate retains responsibility for collecting payment and other described tasks (was, exemption only applied if the company itself retained the described responsibilities). Allows a consumer legal funding company discontinuing its funding in the State to sell its receivables to another consumer legal funding company operating in the State, upon notice to consumers as specified.

Grants the Attorney General enforcement authority over the Act in GS 66-533, including imposing civil penalties not to exceed $10,000 per violation. Prohibits any consumer legal funding company from recovering the funds in a consumer legal funding contract if there is a successful enforcement action against the company. Reorganizes provisions directing that penalty proceeds be remitted to the Civil Penalty and Forfeiture Fund into the statute. Provides for judicial review of actions taken by the Attorney General.

Specifies that attorneys that violate the Act’s provisions on prohibited attorney conduct are subject to discipline by the State Bar of NC.

Removes provisions providing for an examination of a consumer legal funding company along with other provisions granting the Insurance Commissioner power to adopt rules to enforce the Act, impose penalties, and bring enforcement actions.

Directs the SOS to develop forms to implement the registration requirement described above.

Extends the effective date by one year to 2026, and specifies that it applies to violations occurring on or after that date.