A Brooklyn pol with ties to the legal industry has introduced legislation to compete with a proposal that would limit interest rates on cash advances against lawsuit settlements, The Post has learned.

Assemblyman Erik Dilan (D-Brooklyn) last week sponsored a bill to license “consumer litigation funding” firms and prohibit them from engaging in “materially false or misleading advertising.”

But Dilan’s proposal wouldn’t regulate the amount of interest that can be charged by the firms — unlike a pending bill that would cap rates at 16 percent, the legal limit for loans under New York civil law.

A sponsor of that bill, state Sen. Robert Ortt (R-Lockport), said he was blindsided by Dilan’s move, describing that proposal a​s a​ bogus attempt at regulation.

“In my view, that’s the industry’s bill. It’s a toothless bill,” Ortt said.

“When we talk about reform, the real gist is the rates they are charging​ — which to me is the definition of predatory lending.”

Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, also said, “Frankly, without the rate cap, the [Dilan] bill does nothing to protect consumers.”

“New York law has allowed them to be taken advantage of . . . That’s why we need to have protection,” Stebbins added.

Dilan introduced his bill little more than a week after The Post exclusively reported that a Brooklyn-based firm, LawCash, was accused in a since-settled suit of charging as much as 124 percent on its cash advances.

Critics also told The Post that LawCash and its rivals were encouraging questionable suits against the city, which paid out $722 million in civil judgments and claims during fiscal 2017.

State campaign-finance records show that Dilan, a former city councilman serving his second term in Albany, has received $6,100 in donations from LawPAC, the political action committee of the New York State Trial Lawyers Association.

He also got another $6,650 from various law firms around the state, records show.

Dilan’s spokesman didn’t return a request for comment, but an official with the American Legal Finance Association — which is chaired by LawCash President Harvey Hirschfeld — said Dilan’s bill was similar to one previously introduced by the late Assemblyman Michael Simanowitz (D-Queens), who died last September after battling cancer.

ALFA managing director Jack Kelly called Dilan’s bill “very robust” and said it would “make sure there are requirements so individuals know what they owe.”

“We think it’s a good piece of legislation,” Kelly said.

“It ensures the character and fitness of people involved in the transactions.”