AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY -- LITIGATION LENDING AGREEMENTS

HB 5907 would require litigation lending agreements (LLAs) to comply with Rhode Island's usury laws, making high-interest loans to litigants subject to state interest rate limits. It directly affects individuals involved in civil lawsuits who take such loans and the companies providing them, as repayment terms exceeding the loan amount would be treated as interest under existing usury rules. The bill explicitly states that no matter how lenders label these agreements (e.g., "investment" or "advance"), any repayment above the initial amount counts as interest and must adhere to state limits. This policy change would prevent lenders from circumventing usury laws through creative contract terms, ensuring all litigation financing aligns with standard loan regulations.