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AB-743 • 2026

California Financing Law: lawsuit financiers.

California Financing Law: lawsuit financiers.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Michelle Rodriguez
Last action
2025-07-01
Official status
In committee: Set, first hearing. Hearing canceled at the request of author.
Effective date
Not listed

Plain English Breakdown

The bill summary and digest do not provide specific details about the consequences of unintentional rule violations or surety bond costs.

Regulating Lawsuit Financiers in California

This law requires anyone wanting to be a lawsuit financier in California to get a special license and sets rules for them, including maintaining surety bonds.

What This Bill Does

  • Requires anyone who wants to engage in the business of lawsuit financing to obtain a license from the Commissioner of Financial Protection and Innovation.
  • Specifies that licensed lawsuit financiers must maintain a surety bond as prescribed by law.
  • Includes lawsuit financing within the definition of commercial loans regulated under California's Financing Law.
  • Imposes civil penalties for willful violations of the California Financing Law by licensed lawsuit financiers.

Who It Names or Affects

  • People who want to work as lawsuit financiers in California.
  • The Commissioner of Financial Protection and Innovation responsible for issuing licenses.

Terms To Know

Surety bond
A type of insurance that protects against financial loss if someone does not follow the rules they agreed to.
Licensee
Someone who has been given permission by a government agency to do a specific job or business activity.

Limits and Unknowns

  • The bill does not specify what happens if someone breaks the rules unintentionally.
  • It is unclear how much the surety bond will cost for lawsuit financiers.

Bill History

  1. 2025-07-01 California Legislative Information

    In committee: Set, first hearing. Hearing canceled at the request of author.

  2. 2025-06-11 California Legislative Information

    Referred to Coms. on B. & F.I. and JUD.

  3. 2025-06-03 California Legislative Information

    In Senate. Read first time. To Com. on RLS. for assignment.

  4. 2025-06-02 California Legislative Information

    Read third time. Passed. Ordered to the Senate. (Ayes 79. Noes 0. Page 1850.)

  5. 2025-05-27 California Legislative Information

    Read second time. Ordered to third reading.

  6. 2025-05-23 California Legislative Information

    From committee: Do pass. (Ayes 14. Noes 0.) (May 23).

  7. 2025-05-14 California Legislative Information

    In committee: Set, first hearing. Referred to APPR. suspense file.

  8. 2025-05-06 California Legislative Information

    Re-referred to Com. on APPR.

  9. 2025-05-05 California Legislative Information

    Read second time and amended.

  10. 2025-05-01 California Legislative Information

    From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (April 28).

  11. 2025-04-28 California Legislative Information

    Joint Rule 62(a) suspended. (Page 1307.)

  12. 2025-03-25 California Legislative Information

    Re-referred to Com. on B.&F.

  13. 2025-03-24 California Legislative Information

    From committee chair, with author's amendments: Amend, and re-refer to Com. on B.&F. Read second time and amended.

  14. 2025-03-24 California Legislative Information

    Referred to Com. on B.&F.

  15. 2025-02-19 California Legislative Information

    From printer. May be heard in committee March 21.

  16. 2025-02-18 California Legislative Information

    Read first time. To print.

Official Summary Text

AB 743, as amended, Michelle Rodriguez.
California Financing Law: lawsuit financiers.
The California Financing Law generally regulates the business of finance lenders and brokers and prohibits any person from engaging in those businesses without obtaining a license from the Commissioner of Financial Protection and Innovation. The law also imposes various requirements on licensees who offer or sell commercial loans, as defined.
This bill would prohibit a person from engaging in the business of lawsuit financing, as defined, without obtaining a license from the
commissioner.
commissioner, and would generally regulate the business of lawsuit financiers, as specified.
The bill would require a licensee who is a lawsuit financier, as defined, to
maintain a surety bond, as prescribed. The bill would include lawsuit financing in the definition of “commercial loan.” The bill would make willful violations of the California Financing Law by a licensee who is a lawsuit financier subject to a civil penalty, as specified.

Current Bill Text

Read the full stored bill text 
Download Bill PDF