§ 5-3-303 — Assignee subject to claims and defenses

(1) With respect to a
consumer credit sale or consumer lease, an assignee of the rights of the seller or
lessor is subject to all claims and defenses of the buyer against the seller or lessor
arising from the sale or lease of goods or services, notwithstanding that the
assignee is a holder in due course of a negotiable instrument issued in connection
with the consumer credit sale or consumer lease.

(2) A claim or defense of a consumer specified in subsection (1) of this
section may be asserted against the assignee under this section only to the extent
of the amount owing to the assignee with respect to the sale or lease of the goods
or services as to which the claim or defense arose at the time the assignee has
written notice of the claim or defense.

(3) For the purpose of determining the amount owing to the assignee with
respect to the sale or lease:

(a) Payments received by the assignee after the consolidation of two or more
consumer credit sales, except pursuant to a revolving credit account, are deemed
to have been first applied to the payment of the sales first made; if the sales
consolidated arose from sales made on the same day, payments are deemed to
have been first applied to the smallest sale; and

(b) Payments received upon a revolving credit account are deemed to have
been first applied to the payment of finance charges in the order of their entry to
the account and then to the payment of debts in the order in which the entries of
the debts are made to the account.

(4) An agreement may not limit or waive the claims or defenses of a
consumer under this section.

Legislative History

Source: L. 2000: Entire article R&RE, p. 1221, � 1, effective July 1.