HB 925 — Consumers in Crisis Protection Act.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2025 H 21 HOUSE BILL 925 Committee Substitute Favorable 6/25/25 Short Title:

Representatives Eddins, Huneycutt, Humphrey, and Lowery (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Insurance, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House April 14, 2025 A BILL TO BE ENTITLED AN ACT TO ENACT THE CONSUMERS IN CRISIS PROTECTION ACT.

*H925-v-2**H925-v-1* General Assembly Of North Carolina Session 2025 (8) Funded amount.

– A civil claim or cause of action, filed in a court of law in State or federal court, including any claim that triggers obligation arising under G.S.

58-63-15(11)58-63-15(11). or related regulations.

Attorneyliens,Attorney, valid health careproviderliens,andcare ERISAprovider, contractual rights of recovery or subrogation liens.

Page 2 House Bill 925-Second Edition General Assembly Of North Carolina Session 2025 (4) A certificate of authority from the Secretary of State to conduct business in this State or other evidence of the applicant's registration or qualification to do business in this State.

Page 2 House Bill 925-First Edition General Assembly Of North Carolina Session 2025 (5) The qualifications and business history of the applicant, including a description of any injunction or administrative order by any state or federal authority to which the person is or has been subject for the past 10 years.

You acknowledge that your attorney in the legal claim ishas notprovided obligatedno to provide any tax, public or private benefit planning, or financial advice regarding this transaction.

House Bill 925-Second Edition Page 3 General Assembly Of North Carolina Session 2025 You shall not use funds from this transaction to payattorneys'fees or costs related to the litigation of your claim." (5) A requirement that a copy of the executed consumer legal funding contract shall promptly be delivered to the consumer's attorney upon request.

(6)House ABill statement925-First ofEdition thePage maximum3 totalGeneral amountAssembly toOf beNorth assignedCarolina bySession the2025 consumer(e) toEach thecontract consumershall legalinclude fundingconsumer company,disclosures includingon the fundedfirst amounttwo andpages, allto charges.the extent possible.

(e) Each contract shall include consumer disclosures on the first two pages, to the extent possible.

Page 4 House Bill 925-Second Edition General Assembly Of North Carolina Session 2025 (5) The attorney is obligated to disburse proceeds from the legal claim and pay the funded amount and charges due per the terms of the consumer legal funding contract.

(6) Only liens related to the legal claim, including attorney liens, Medicare, Veterans Affairs, TriCare, Medicaid, State Employees Health Plan, ERISA contractual rights of recovery, valid health care provider liens, or other statutory liens, take priority over any contractual lien of the consumer legal funding company.

(7) The attorney for the legal claim ishas notprovided obligatedno to provide any tax, public or private benefit planning, or financial advice regarding the consumer legal funding transaction.

Page 4 House Bill 925-First Edition General Assembly Of North Carolina Session 2025 (g) The failure of the attorney retained by the consumer for the legal claim to provide written attestation as required by this section renders the contract null and void.

(b) TheA contracted amount to be paid to the consumer legal funding company shallmay becharge a predeterminedconsumer amountonly based upon intervals of time from the fundingfollowing: date through the resolution date and shall not be determined as a percentage of the recovery from the legal claim.

(c)(1) Upon writtenfunding, requesta fromcharge thenot consumerto orexceed theeighteen consumer'spercent attorney,(18%) of the consumerfunded legalamount fundingand companyaservicingchargenot shall reduce charges to aexceedthree maximumandone-halfpercent of(3.5%) twenty-five percent (25%) of the grossfunded proceedsamount. from the legal claim.

Any(2) suchUpon writtenevery requestsubsequent mustsix-month includeanniversary, ana attestationcharge asnot to theexceed finaleighteen amountpercent (18%) of the grossfunded proceedsamount fromand a servicing charge not to exceed three and one-half percent (3.5%) of the legalfunded claim.amount.

(d)If, Nochargeshowever, shallwithin accrueonaconsumerlegalfive fundingtransactiondays morethan36months after executionthe start of a new six-month interval, the consumer legal funding contract.company receives payment of the full amount owed by the consumer for the immediately preceding six-month interval, no additional charges shall be charged for the new six-month interval.

(3) A document preparation charge, not to exceed two hundred fifty dollars ($250.00), that maybe deducted from the funded amount, to be used to defray the cost of opening, funding, administering, and terminating a consumer legal funding transaction.

(c) Nocharges shall accrueonaconsumerlegal fundingtransactionmorethan36 months after execution of the consumer legal funding contract.

(5) Receiveanyright tomakeanydecisionswith respecttoorattempttoinfluence a decision relating to the conduct, settlement, or resolution of the consumer's House Bill 925-Second Edition Page 5 General Assembly Of North Carolina Session 2025 legal claim.

House Bill 925-First Edition Page 5 General Assembly Of North Carolina Session 2025 (7) Fail to promptly provide copies of contract documents to the consumer or the consumer's attorney upon request.

(13) Knowingly offering or colluding to provide funding as an inducement to a consumer who is presently represented by counsel to terminate that engagement and engage such lawyer or law firm to represent them in the same matter.

Any consumer legal funding contract entered into in violation of this paragraph shall be void ab initio.

(14) Collude with or knowingly assist a lawyer or law firm that is inducing or intends to induce a consumer to bring a claim that the company knows or has reason to know is fabricated or otherwise not brought in good faith.

Any consumer legal funding contract entered into in violation of this subdivision shall be void ab initio.

(15) Accepting any funds from a foreign government or foreign non-government person identified as a foreign adversary in 15 C.F.R.

§ 791.4, including any agent or entity affiliated with such foreign adversary.

(a) An attorney retained by a consumer for a legal claim,claim orshall thatnot attorney'shave immediatea familyfinancial member,interest in the consumerlegal fundingcompanyofferingconsumerlegal fundingto theconsumer.Additionally, any attorney who has referred the consumer to the consumer's retained attorney shall not have a financial interest in the consumer legal funding company offering consumer legal funding to the consumer.

Additionally,A anyconsumer attorneylegal whofunding hascontract referredthat theviolates consumerthis tosection theis consumer'snull retainedand attorneyvoid, shalland notno haveperson has a financialright interestto incollect, theattempt consumerto legalcollect, fundingreceive, companyor offeringretain consumerany legalfunded fundingamount or charges related to the consumer.consumer legal funding.

(b) An attorney retained by a consumer for a legal claim shall not execute a consumer legal funding contract on behalf of the consumer.

Page 6 House Bill 925-Second Edition General Assembly Of North Carolina Session 2025 (c) A consumer legal funding contract that violates this section is null and void, and no person has a right to collect, attempt to collect, receive, or retain any funded amount or charges related to the consumer legal funding.

Page 6 House Bill 925-First Edition General Assembly Of North Carolina Session 2025 (b) Admission.

(b) The powers vested in the Commissioner by this Article are in addition to and do not limit the ability of the Commissioner or any other officer, employee, or agent of the State to take enforcement action." House Bill 925-Second Edition Page 7 General Assembly Of North Carolina Session 2025 SECTION 2.

Page 8 House Bill 925-Second925-First Edition Page 7