In September of 2019, the Nevada Senate passed Bill No. 432 (S.B. 432) creating a new chapter in Nevada Revised Statutes (NRS 604C) governing Consumer Litigation Funding. This new bill gave the Financial Institutions Division the authority to license and regulate consumer litigation funding.
What is a Consumer Litigation Funding Company?
A consumer litigation funding company provides a service in which the company purchases a portion of a future settlement by lending current funds to the litigant or counsel. This means that the company will give the client a cash advance on their pending settlement, and in return the company will receive payment when the case settles.
What does this mean for established Consumer Litigation Funding Companies?
All pre-settlement, or consumer litigation funding transactions, contracts, loans, and the like with licensed companies under NRS 675 (Installment Loans) prior to October 1, 2019, shall be regulated under NRS Chapter 675, unless or until amended, renewed, consolidated, extended, or refinanced.
All new, renewed, consolidated, extended, refinanced, etc. transactions issued after October 1, 2019 will be subject to the provisions under S.B. 432. This means that consumer litigation companies must surrender their license under NRS 675, and apply for new licensure under S.B. 432, with the Financial Institutions Division. Consumer Litigation Funding Companies may not conduct business until the submitted application has been approved, and a license issued by the Financial Institutions Division under the new statute.
Contact Black & Wadhams
Black & Wadhams operates a separate licensing and regulation compliance unit within its Reno, Carson City and Las Vegas offices. Feel free to contact James Wadhams to discuss any questions or potential regulatory issues you may have: firstname.lastname@example.org or 702-869-8801