The Third-Party Litigation Funding Transparency Act aims to enhance consumer protections in Iowa by establishing comprehensive regulations for consumer litigation funding transactions. The legislation mandates that all funding contracts be clearly written and fully completed, including detailed disclosures about the funded amount, associated charges, and the consumer's rights, such as a right of rescission within ten business days. It also prohibits funding companies from engaging in practices like paying referral fees to attorneys or influencing legal decisions. The Act introduces new sections to the Iowa Code that define key terms, outline contract requirements, and impose penalties for violations.

Additionally, the bill specifies that contracted funding amounts must be predetermined based on time intervals rather than a percentage of the recovery from the legal claim. It establishes a duty for consumers to disclose any litigation funding contracts to relevant parties within a specified timeframe and ensures that these contracts are presumed discoverable in civil proceedings but inadmissible as evidence. The legislation requires funding companies to register with the Secretary of State, submit annual reports, and comply with specific disclosure requirements, while also protecting communications between consumers and their attorneys regarding funding. The provisions will apply to agreements made on or after July 1, 2025.