On Tuesday, the Tennessee Senate passed SB 1360, a bill to regulate the predatory practice of lawsuit lending.
Lawsuit lenders currently operate with little or no oversight, allowing them to charge interest rates exceeding 100 percent of the loan. The Senate bill caps annual interest on such loans at 25 percent and limits the terms of the loan to three years. It also calls for additional contract disclosures and a five day cancellation period.
To highlight the problems with lawsuit lending, ILR launched a consumer website (LawsuitLendingTruth.com) featuring real life victims of predatory lending. The Tennessee Report notes the site in its write-up of the vote as well as the Chamber's opposition to the "growing and troubling practice."