Page:United States Statutes at Large Volume 85.djvu/700

 670

Post, p. 675.

Ante. p. 667.

PUBLIC LAW 92-200-DEC. 17, 1971

[85 STAT.

judgment prohibited " (a) A creditor may not take an assignment of earnings of the consumer for payment or as security for payment of an ooligation arising out of a consumer credit sale or direct installment loan. " (b) A creditor may not take or accept from the consumer a warrant or power of attorney or other authorization for the creditor, or other person acting on his behalf, to confess judgment arising out of a consumer' credit sale or direct installment loan. "(c) An a l i g n m e n t of earnings or an authorization in violation of this section is subject to the provisions of section 28-3813 (d)(1) of this subtitle. "§ 28-3805. Debts secured by cross-collateral " (a) If debts arising from tw;o or more consumer credit sales other than salcs pursuant to a revolving charge account (§28-3701), are secured by cross-collateral, or consolidated into one debt payable on a single schedule of payments, and the debt is secured by security interests taken with respect to one or more of the sales, paymente received by the seller after the taking of the cross-collateral or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been first applied to the payment of the debts arising from the sales first made. To the extent debts are paid according to this section, security interests in items of property terminate as the debts originally incurred with respect to each item are paid. " (b) Payment received by the seller upon a revolving charge are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of credit service charges in the order of their entry to the account and then to the payment of debts in the order in which the entries to the account showing the debts were made. "(c) If the debts consolidated arose from two or more sales made on the same day, payments received by the seller are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of the smallest debt. "With respect to a consumer credit sale or direct installment loans the agreement may provide for the payment by the consumer of reasonable attorney's fees not in excess of 15 per centum of the unpaid balance of the obligation. "§28-3807. Negotiable instruments prohibited " (a) I n a consumer credit sale, no seller shall take or otherwise arrange for the consumer to sign an instrument, except a check, payable 'to order' or 'to bearer' as evidence of the credit obligation of the consumer. " (b) Any holder of an instrument prohibited by subsection (a) of this section 28-3807, if he takes it with knowledge of a violation of this section, takes it subject to all claims and defenses of the consumer u p to the amount owing on the transaction total at the time of the assignment. "§ 28-3808. Assignees subject to defenses " (a) With respect to a consumer credit sale, an assignee of the rights of the seller or lessor is subject to all claims and defenses of the consumer or lessee arising out of the sale notwithstanding any terms or agreements to the contrary, but the assignee's liability under this section may not exceed the amount owing to the assignee at the time of the assignment.
 * '§ 28-3804. Assignment of earnings and authorization to confess
 * § 28-3806. Attorney's fees

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