The Litigation Financing Transparency and Consumer Protection Act establishes a regulatory framework for litigation financing contracts in Iowa, requiring all litigation financers to register with the Secretary of State. The bill defines key terms such as "consumer," "entity," "litigation financer," and "litigation financing," and mandates that registration includes the legal name and contact details of the financer, with all documents filed being public records. It prohibits certain practices, including paying referral fees and charging excessive interest rates, while also requiring clear disclosures to consumers about financing contract terms.

Additionally, the bill introduces joint and several liability for litigation financers concerning costs or monetary sanctions imposed on consumers and grants the Secretary of State the authority to implement regulatory oversight through rulemaking. It mandates that consumers receive a true copy of the financing contract upon request and ensures that all parties in a civil action are informed of any financing agreements. Violations of the bill's terms will render financing contracts unenforceable and subject violators to penalties for usury if interest rates exceed legal limits. The act is set to take effect on January 1, 2026, applying to all civil actions or administrative proceedings involving litigation financers initiated after that date.