House
Study
Bill
218
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
COWNIE)
A
BILL
FOR
An
Act
relating
to
consumer
lawsuit
lending
transactions,
and
1
including
effective
date
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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H.F.
_____
Section
1.
Section
537.1301,
subsection
27,
paragraph
a,
1
Code
2013,
is
amended
by
adding
the
following
new
subparagraph:
2
NEW
SUBPARAGRAPH
.
(6)
(a)
The
provision
of
a
cash
advance
3
or
funds
to
a
consumer
in
exchange
for
that
consumer
assigning,
4
conveying,
or
otherwise
conferring
to
the
person
or
entity
5
advancing
the
cash
advance
or
funds
the
right
to
receive
6
the
proceeds,
or
a
part
of
the
proceeds,
of
the
settlement,
7
insurance
payment,
or
award
of
damages
obtained
in
either
of
8
the
following:
9
(i)
A
consumer’s
civil
action,
or
statutory
or
regulatory
10
claim,
for
which
damages
may
be
awarded
to
the
consumer
or
11
claiming
party.
12
(ii)
A
cause
of
action
or
legal
claim
upon
which
a
civil
13
action
or
statutory
claim
described
in
subparagraph
subdivision
14
(i)
may
be
based,
regardless
of
whether
the
right
to
receive
15
the
proceeds
is
nonrecourse.
16
(b)
For
purposes
of
this
subparagraph,
“nonrecourse”
17
means
the
consumer
or
the
consumer’s
members,
partners,
or
18
shareholders,
if
any,
or
any
related
person
to
a
member,
19
partner,
or
shareholder,
does
not
bear
the
risk
of
financial
20
loss
to
the
person
or
entity
advancing
a
cash
advance
or
funds.
21
Sec.
2.
Section
537.1301,
subsection
27,
paragraph
b,
Code
22
2013,
is
amended
by
adding
the
following
new
subparagraph:
23
NEW
SUBPARAGRAPH
.
(3)
Providing
professional
legal
24
services
or
the
advancement
of
litigation
expenses
by
25
an
attorney
licensed
to
practice
law
in
this
state
to
an
26
individual
on
a
contingency
basis.
27
Sec.
3.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
28
immediate
importance,
takes
effect
upon
enactment.
29
EXPLANATION
30
This
bill
expands
the
definition
of
a
“loan”
for
purposes
31
of
Code
chapter
537,
the
consumer
credit
code,
to
include
32
providing
a
cash
advance
or
funds
to
a
consumer
in
exchange
for
33
that
consumer
assigning,
conveying,
or
otherwise
conferring
to
34
the
person
or
entity
advancing
the
cash
advance
or
funds
the
35
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2
H.F.
_____
right
to
receive
the
proceeds,
or
a
part
of
the
proceeds,
of
1
the
settlement,
insurance
payment,
or
award
of
damages
obtained
2
under
specified
circumstances.
Those
circumstances
include
a
3
consumer’s
civil
action,
or
statutory
or
regulatory
claim,
for
4
which
damages
may
be
awarded
to
the
consumer
or
claiming
party,
5
or
a
cause
of
action
or
legal
claim
upon
which
a
civil
action
6
or
statutory
or
regulatory
claim
may
be
based,
regardless
of
7
whether
the
right
to
receive
the
proceeds
pursuant
to
the
8
cause
of
action
or
legal
claim
is
nonrecourse.
The
bill
9
defines
“nonrecourse”
to
mean
that
the
consumer
or
its
members,
10
partners,
or
shareholders,
if
any,
or
any
related
person
to
11
a
member,
partner,
or
shareholder,
does
not
bear
the
risk
of
12
financial
loss
to
the
person
or
entity
advancing
a
cash
advance
13
or
funds.
14
Additionally,
the
bill
provides
that
providing
professional
15
legal
services
or
the
advancement
of
litigation
expenses
by
an
16
attorney
licensed
to
practice
law
in
Iowa
to
an
individual
on
a
17
contingency
basis
shall
not
be
considered
a
“loan”
for
purposes
18
of
Code
chapter
537.
19
The
bill
takes
effect
upon
enactment.
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