Bill Summary for S 357 (2021-2022)

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Summary date: 

Sep 22 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 357 (Public) Filed Thursday, March 25, 2021
AN ACT TO ENACT THE HELPING CONSUMERS IN CRISIS ACT.
Intro. by Johnson, Craven, Alexander.

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Bill summary

Senate committee substitute to the 1st edition makes the following changes.

Amends the definitions that apply to new Article 94, the "Helping Consumers in Crisis Act," to GS Chapter 58, as follows. Amends the definition of charges so it is defined as any fees allowed by the Article to be charged to a consumer by a consumer legal funding company, regardless of how denominated, including charges denominated as interest or rate (was, the amount a consumer owes to a person in addition to the funded amount, including an administrative fee, origination fee, underwriting fee, processing fee, and any other fee regardless of how the fee is denominated, including amounts denominated as interest or rate). Adds and defines the term control as it is defined in GS 53-244.030. Changes the definition of legal claim to a civil claim or cause of action (was, a bona fide civil claim or cause of action). Instead of defining Nationwide Multistate License System and Registry as it is defined under GS 53-244.030, sets out that full definition instead of using the statutory cross-reference. Amends the definition of net proceeds to now be defined as the amount recovered by a consumer as a result of a legal claim less the following costs and liens associated with the legal claim (was, less costs and liens associated with either the legal claim or the underlying events giving rise to the legal claim), including any of the following: (1) attorneys' fees and litigation costs associated with the legal claim and (2) the specified liens. Adds and defines the term person as it is defined in GS 53-244.030.

Makes a clarifying change in GS 58-94-15.

Amends GS 58-94-25, which requires a legal funding contract to contain seven attestations by the attorney retained by the consumer for the legal claim, by providing that the failure of the attorney or the law firm retained by the consumer in the legal claim to provide the written attestation (was, to comply with the written acknowledgement) renders the contract null and void. Amends the items that must be included in the contract's consumer disclosures as follows: (1) requires including the total amount due from the consumer, in 180-day (was, six-month) intervals for 1,080 days (was, 36 months), including all charges; (2) requires including a statement that there are no payments owed by the consumer (there are no fees or charges to be paid by the consumer) other than what is disclosed on the disclosure form; and (3) requires a statement that if the net proceeds of the claim are insufficient to repay the consumer's indebtedness to the company, defined as the complete funded amount and charges, the company shall accept the amount that can be repaid from the net proceeds (was, a reduced sum) as full payment of its funded amount and charges. 

Amends GS 58-94-30 by adding to the prohibited acts by consumer legal funding companies, collecting from the consumer any fee that is not authorized under new GS 58-94-27.

Amends GS 58-94-50 (Confidentiality of information) by providing that as a condition of reporting or sharing information as provided for in the statute, the Commissioner must require as part of the agreement that any confidential record or information shared with the entity be treated as confidential under the applicable laws and regulations governing the recipient entity. Provides that any privilege that arises under any other federal or State law with respect to the shared reports or information applies to that information after it has been disclosed to an entity described in the statute. 

Deletes proposed GS 58-94-65, which required each consumer legal funding company to report annually to the Commissioner on the company's business and operations during the preceding calendar year in this state, including specified information.