The "South Carolina Transparency in Consumer Legal Funding Act" introduces new regulations aimed at enhancing consumer protections in legal funding transactions. The legislation requires that consumer legal funding contracts be written in clear language, include a right of rescission, and provide detailed disclosures about charges and obligations. It prohibits deceptive practices by funding companies, such as paying referral fees to attorneys, and mandates that these companies register with the state. The act also establishes penalties for violations, including the forfeiture of the right to recover funds in cases of willful noncompliance. Notably, it clarifies that consumer legal funding is not classified as a loan, thus exempting it from loan regulations.

Additionally, the bill outlines specific requirements for consumer legal funding companies, including a biennial registration fee of fifty dollars and the necessity for a bond or irrevocable letter of credit to ensure compliance. It allows companies to engage in funding while their registration is pending approval, provided they have registered within a specified timeframe. The act mandates that all consumer legal funding contracts must be filed with the Secretary of State, who will also have the authority to adopt rules for implementation. A severability clause is included to maintain the validity of the remaining provisions if any part of the act is found unconstitutional. The act will take effect upon the Governor's approval.