The past several years have been tough on many consumers.

Between the great recession, Hurricane Katrina and the disruption caused by BP, Louisiana has taken its fair share of economic hard knocks these past few years.

Understandably, folks have found themselves in need of cash on short notice without many options available to them.

In some of those instances, people turned to a future source of funds that were needed now in order to persevere. To make sure bills were paid and families were kept intact, some folks turned to companies that purchase a piece of the value of their life insurance policy and turn that money over to the consumer for use. When the policies become due, those companies are paid out according to the value of the contract they purchased.

This same exact scenario occurs in another method of acquiring cash now from the future value of a personal asset: consumer legal funding.

In instances where consumers are hurt through no fault of their own and are owed a just settlement by an insurance company, some do not have the resources saved to be out of work while waiting for their claim to resolve. A recent survey by said that almost half of U.S. adults have less than $800 dollars in savings.

Financial innovation has allowed my company to provide a solution for Louisiana consumers. We purchase a small portion of the claim and wait for the case to be resolved, which could potentially stretch on for years. The consumer has to repay us if and only if their claim is successful.

To be very clear: We are not providing a loan.

We receive neither an understanding nor a guarantee that the purchase price we pay to consumers will be returned. This creates an important legal distinction as states have adopted the definition of a “loan” to mean that there is a mutually agreed upon understanding that the money has to be personally paid back.

Our product is not without controversy, especially because we have made powerful enemies in big insurance companies. When a consumer does not have any savings to rely upon, fixed assets from which to secure a loan or strong enough credit to go to a bank, insurance companies have learned they can offer a smaller settlement. Consumers — especially those who cannot work due to injury — will often take these lower settlements. This increases the profit margins of big insurance companies and they have a powerful motivation to eliminate our product as an option for Louisiana consumers.

Louisiana is currently considering Senate Bill 299 to regulate our product with consumer friendly practices we endorse, but the special interests representing the insurance industry are trying to change this legislation to eliminate this option for Louisiana consumers. We encourage lawmakers in the House to follow the Senate’s lead. Pass SB299 as is and preserve our product as an option for their constituents in their time of need.

Ralph Shayne

founder, Oasis Legal Finance