Perhaps you've seen a TV ad for a company willing to lend you money while the courts deal with your lawsuit for damages because of an accident?
State Sen. Brian Munzlinger wants Missouri lawmakers to start regulating those companies, just as other kinds of loans are regulated in the state.
"We don't really have a large problem here in Missouri, but this (bill) is trying to head it off," Munzlinger, R-Williamstown, told the Senate's Judiciary Committee last week. "As with any industry, it would be nice if we had a road map or a rule book to follow - and that's kind of what I'd like to get here."
Munzlinger calls his proposed law the "Missouri Nonrecourse Consumer Legal Lending Act."
It specifies requirements that each legal lending contract must contain when presented to a consumer, including disclosures, the lending company's business address, a place for the consumer to acknowledge reviewing the contract and an acknowledgment by the consumer's attorney in the legal claim the loan would be based on.
In some states, Munzlinger said, bar associations have questioned the loans on lawyers' ethical grounds, while some consumer groups want the loans banned.
On the other hand, he said, some of the lending companies would prefer no regulations.
"My idea was to come up with a middle-ground approach, that does lay out the groundwork of what would be acceptable here in the state of Missouri," Munzlinger said. "I think I've got the perfect bill here, because I don't think anybody likes it."
No one testified for the proposed law.
But several opposed it, including the Oasis Legal Services company, which provides the kind of loans Munzlinger's law would target.
"Our main problem with the bill is, it mischaracterizes the nature of the transaction as a "loan,'" Kevin Connor, Oasis Legal Services' general counsel, explained. "It is wholly contingent on the consumers' success in prosecuting a claim. No debt is created."
The contracts generally require the consumer to repay the money only if they win their case.
Connor said company managers review a court case and its claims, to make sure the clients seeking money have a good chance of winning a court-ordered payment.
"This product is an important product," Connor testified, "that affords consumers the opportunity to pay critical personal expenses - literally, keep the lights on and food on the table - while they await fair settlement of their (legal) claims."
Connor said his company doesn't oppose many of the regulations and consumer protections that Munzlinger included in his proposed law.
Harry Gallagher, lobbyist for the Property Casualty Insurers Association of America, told the committee that lawsuit lending is a bad idea.
"A claimant gets their hopes up and is going to borrow money to fund a lawsuit that is going to swell court dockets," he said, noting America's - and Missouri's - courts already have plenty of business.
The Missouri Chamber of Commerce and Industry also testified against Munzlinger's bill.
"The nature of our opposition is not that we don't think that there should be any regulation," said Jay Atkins, the Chamber's general counsel and registered lobbyist, "but, quite frankly, we don't think this bill goes far enough.
"We would like to see more meaningful reforms put in place."
Atkins told the committee the lawsuit lending industry is "really, the sole example of a consumer lender that is not subject to some sort of regulation" while "every other consumer lending group that does business in Missouri is subject to some sort of regulatory framework, to one degree or another."
Atkins estimated the loans generally range from "a few thousand to $10,000," with the average loan amount "in the neighborhood of $6,000-$7,000. But that interest accrues over the duration of the litigation."
Connor told the committee Atkins estimates are too high.
"The average size of the extension of credit in Missouri is about $2,600," Connor testified. "We do about 300 (loans) a year, on average - that's about $800,000."
Compared with last year's $2.8 billion in auto insurance policies, Connor said, lawsuit lending "is a very small industry."
And, he said, Oasis' contracts with consumers run an average of about 18 months, nationally - shorter than several other witnesses said.
Kelly Gilroy, director of the American Legal Finance Association that represents companies like Oasis, also objected to calling the consumer transactions "loans."
"It is very different from a loan," Gilroy said. "There's no income verification, no credit checks, no collateral (and) no fixed maturity date.
"These companies don't know when, or if, a case will settle."