Funder Agrees to $1 Settlement with CFPB over 9/11 Fund Litigation

[Gunnar Larson]

https://litigationfinancejournal.com/funder-agrees-to-1-settlement-with-cfpb-over-9-11-fund-litigation/


As the litigation finance industry has matured, the possibility of funders
running afoul of legal oversight grows. This was the case in a recent
settlement between RD Legal Funding LLC and the U.S. Consumer Financial
Protection Bureau.


Reporting in Reuters covers the announced settlement, which highlighted the
funder’s alleged predatory lending practices with 9/11 first responders,
where it allegedly charged 250% interest on loans to these clients. While
RD Legal did not admit any wrongdoing, the settlement required the funder
to pay a whopping $1 for breaking New York’s state law concerning
high-interest loans.

RD Legal had argued that the financial assistance it provided to the first
responders were not loans, but instead ‘sales of legal receivables’ as part
of its funding agreements. The CFPB and the New York Attorney General’s
Office had originally sought higher damages outlined under the state’s
consumer protection law. However, the CFPB stated that this settlement
provides the first responders access to the victim relief fund, totalling
$482 million–hence the miniscule agreement.
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