This article was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding.
Montani semper liberi; “Mountaineers are Always Free” is the motto of the State of West Virginia, but apparently the motto only applies to a select group of Mountaineers. The Legislature of West Virginia passed – and the Governor signed into law – Senate Bill 360 which sets out to regulate Consumer Legal Funding in the state. Unfortunately, SB 360 is a set of meaningless regulations, given that the legislation implements rate restrictions on the Consumer Legal Funding Industry which restrict the product from even being offered to the citizens of the state. So in essence, SB 360 bans the product altogether.
A similar rate was introduced and enacted in Arkansas in 2017, and the product has not been offered there since. What is interesting is that Arkansas and West Virginia are among the top 10 poorest states in the country, meaning their citizens are consumers who can least afford to lose a significant source of financial support that would otherwise be available to them. Then again, perhaps that’s the Insurance industry’s reason for targeting these states in the first place.
Consumer Legal Funding is a lifeline for people who have a pending legal claim, such as a car accident. It allows them to put food on the table while their case is making its way through the legal system. Like Alice from West Union, WV who stated, “I am unable to work and having a really hard time providing for my kids, and this is a major help.” Or Mary from Follansbee, WV who said “It helped prevent shut off notices, and paid my rent”. Unfortunately, consumers like Mary and Alice will no longer have the ability to help make ends meet thanks to the enactment of SB 360.
This legislation was driven by the Insurance industry and the US Chamber of Commerce, with the sole purpose of eliminating access to this vital financial resource. The industry tried to work with the legislature in reaching a compromise that would allow for proper regulation and oversight, yet still permit the industry to operate. But at every turn, the US Chamber of Commerce, the Insurance Industry and their lobbyists swooped in and leveraged their might against consumers in order to prevent this product from being offered.
Montani semper liberi – “Mountaineers are Always Free” – that motto is supposed to apply to all citizens of West Virginia. Unfortunately, those with enough clout and influence can relinquish the freedom of citizens to access a financial product which allows them to make ends meet, while the multibillion-dollar insurance industry increases profits and squeezes out the very consumers that SB 360 is ostensibly trying to help.
Eric Schuller
President
Alliance for Responsible Consumer Legal Funding
