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Companies that advance money to plaintiffs involved in personal injury lawsuits are campaigning in state capitals for legislation making clear that their growing industry is not subject to usury limits on interest rates or other state laws that protect borrowers.

Since February, they have persuaded legislators in at least five states, including New York, Alabama, Kentucky, Indiana and Maryland to introduce bills based on the industry’s own proposals. Legislators in Tennessee and Maryland have also introduced similar bills, but with somewhat stronger consumer protections. Another state focused on by lawsuit lending companies is Arkansas, who is promoting a bill that would ban lawsuit lending completely.


1. What are usury laws?

2. The article mentioned that Oasis Legal Finance is one of the largest lawsuit lenders and charges 250 percent of the loan amount to clients.  Based on this, if someone borrowed $20,000 to defend themselves in court, how much would they have to repay?

3.  Do you agree or disagree with the lawsuit lender industry’s argument that it needs to be exempt from state regulations that govern other kinds of lending?  Why or why not?


Appelbaum, B. (2011). Lobby Battle Over Loans for Lawsuits, The New York Times,  March 9 (Retrievable Online at