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Session Laws, 1972
Volume 708, Page 5   View pdf image
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Marvin Mandel, Governor                             5

196A.

(a) Any licensee who makes a loan under this subtitle for the
purpose of enabling a borrower to buy goods or services, other than
for an agricultural purpose
USED PRIMARILY FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES, is subject to, in addition
to any claims and defenses provided the borrower elsewhere in this
Article, all claims and defenses of the borrower against the seller
arising from the sale of goods and services if:

(1) The licensee knows that the seller arranged for the extension
of credit by the licensee;

(2) The sale is made in this State by a seller who allows the buyer

to purchase the goods or services pursuant to a licensee credit card

or similar arrangement and the residence of the buyer is in this

State;

(3) (2) The licensee otherwise knowingly participated in the
sale.

(b)    In determining knowing participation by the licensee in a
sale transaction, consideration may be given to the following factors,
among others:

(1)    That the licensee was a person related to the seller unless the
relationship was remote or was not a factor in the sale or loan; OR

(2)    The proceeds of the loan were made payable in whole or in
part to the seller; OR

(3)    The licensee takes a purchase money security interest in the
goods which are the subject of the sale; OR

(4)    That the seller guaranteed the loan or otherwise assumed the
risk of loss by the licensee upon the loan; OR

(5)    That the licensee directly supplied the seller with a form
used by the borrower to evidence or secure the loan; or

(6)    That the loan was conditioned on the borrower's purchase of
the goods or services from the particular seller, but the licensee's
payment of proceeds of the loan to the seller does not in itself estab-
lish that the loan was so conditioned.

(c)    The licensee's liability under this section may not exceed
the amount owing to the licensee with respect to the sale at the time
the licensee has notice of a claim or defense of the buyer against the
seller. If two or more loans, other than pursuant to a revolving loan
account, are consolidated, payments received after the consolidation
are deemed, for the purpose of determining the amount owing the
licensee with respect to the sale, to have been first applied to the
payment of the loans first made; if the loans consolidated arose from
sales made on the same day, payments are deemed to have been first
applied to the smallest loan. Payments received upon a revolving
loan account are
deemed, for the purpose of determining the amount
owing the licensee with respect to the sale, to
have been first applied
to the payment of credit service charges in the
order of their entry to

the account and then to the payment of loans in the order in which

the entries to the account showing the loans were made.

 

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Session Laws, 1972
Volume 708, Page 5   View pdf image
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