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Read. Follow. Verify.North Carolina requires consumer legal funding companies to register, caps fees at 18%, and prohibits litigation influence
Last action · July 1, 2026: Ref To Com On Rules and Operations of the Senate (Senate action)Sponsors: Blair Eddins and 3 others
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What This Bill Would Do
North Carolina establishes the Consumers in Crisis Protection Act, requiring consumer legal funding companies to register with the Commissioner of Insurance, pay a $1,000 fee, and maintain a $50,000 surety bond or letter of credit. The law caps allowable charges at 18 percent of the funded amount plus a 3.5 percent servicing charge per six-month period, prohibits companies from influencing legal claims, and sets a 36-month cap on charge accrual.
The measure changes financial obligations and protections for individuals using pre-settlement lawsuit funding by limiting total charges, establishing protections if a claim fails, and creating registration requirements enforced by the Department of Insurance.
- North Carolina operates under a bicameral General Assembly consisting of a Senate and a House of Representatives. context
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
Consumers
Consumers seeking legal funding are subject to new contract disclosures, fee caps, a 10-day right of rescission, and nonrecourse protections limiting repayment obligations to claim proceeds.
Consumer legal funding companies
Companies must register with the Commissioner of Insurance, pay a $1,000 fee every three years, maintain a $50,000 bond, limit charges to statutory caps, and adhere to prohibited conduct rules.
Attorneys
Attorneys retained by consumers must provide a written attestation regarding disclosures and fee agreements, deposit gross proceeds into a client trust account, and follow irrevocable consumer instructions.
Key Facts
- Consumer legal funding companies must register with the Commissioner of Insurance, submit proof of financial stability, and pay a nonrefundable fee of $1,000 at registration and upon each three-year renewal.
- Companies must provide evidence of financial stability through certified financial statements and a surety bond or irrevocable letter of credit for $50,000.
- Allowable charges are capped at 18 percent of the funded amount and a 3.5 percent servicing charge upon funding and every subsequent six-month anniversary.
- No charges may accrue on a consumer legal funding transaction more than 36 months after execution of the contract.
Show all 10 facts
- Contracts must include a 10-business-day right of rescission allowing consumers to cancel without penalty by returning all funds.
- If a consumer obtains no recovery from a legal claim, the consumer has no obligation to repay the funding company unless the consumer committed fraud.
- Consumer legal funding companies are strictly prohibited from paying referral fees to attorneys or health care providers, providing legal advice, or attempting to influence the conduct or settlement of the legal claim.
- Contracts lacking a written attestation from the consumer's attorney regarding disclosure and fund handling are null and void.
- The Commissioner may assess civil penalties of up to $10,000 for each willful violation, order restitution, or issue cease-and-desist orders after notice and hearing.
- The act takes effect October 1, 2025.
Frequently Asked Questions
What happens if I lose my legal claim and recover no money?
Can a legal funding company tell my attorney how to settle my lawsuit?
What is the maximum fee a funding company can charge?
Do I have a right to cancel a legal funding contract after signing it?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently passed chamber. The next step in the legislative lifecycle is Law.
Procedural history
24 actions- Jul 1, 2026SenateRef To Com On Rules and Operations of the Senate
- Jul 1, 2026SenatePassed 1st Reading
- Jul 1, 2026SenateRegular Message Received From House
- Jul 1, 2026HouseRegular Message Sent To Senate
- Jun 30, 2026HouseOrdered Engrossed
- Jun 30, 2026HousePassed 3rd Reading
Show 18 earlier actions
- Jun 30, 2026HousePassed 2nd Reading
- Jun 30, 2026HouseAmend Adopted A1
- Jun 30, 2026HouseAdded to Calendar
- Jun 30, 2026HouseCal Pursuant Rule 36(b)
- Jun 30, 2026HouseReptd Fav Com Sub 3
- Jun 23, 2026HouseRe-ref Com On Rules, Calendar, and Operations of the House
- Jun 23, 2026HouseWithdrawn From Com
- Jun 16, 2026HouseRe-ref to the Com on Finance, if favorable, Rules, Calendar, and Operations of the House
- Jun 16, 2026HouseWithdrawn From Com
- Jun 16, 2026HouseRe-ref Com On Rules, Calendar, and Operations of the House
- Jun 16, 2026HouseReptd Fav Com Sub 2
- Jun 10, 2026HouseRe-ref to the Com on Judiciary 1, if favorable, Rules, Calendar, and Operations of the House
- Jun 10, 2026HouseWithdrawn From Com
- Jun 25, 2025HouseRe-ref Com On Finance
- Jun 25, 2025HouseReptd Fav Com Substitute
- Apr 14, 2025HouseRef to the Com on Insurance, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House
- Apr 14, 2025HousePassed 1st Reading
- Apr 10, 2025HouseIntroducedFiled
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Introduction of Comprehensive Licensing for Legal Funding
North Carolina creates a specialized regulatory framework under the Department of Insurance for pre-settlement funding companies, previously operating without dedicated statutory licensure.
Connected Entities
Sources
www.ncleg.gov
Analysis Score
0–100- Significance85How much this matters to a regular citizen
- Controversy60Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz40Current news / social attention level
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