Marvin Mandel, Governor
applied to the payment of the loans first made; if the loans consoli-
dated 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 deter-
mining the amount owing the association 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.
Sec. 4 2. Be it enacted by the General Assembly of Maryland, That
new Section 24 be and it is hereby added to Article 58A of the Code
(1968 Replacement Volume and 1970 Supplement), title "Loans—
Consumer," to follow immediately after Section 23 thereof, and to
read as follows:
24.
(a) Any licensee who makes a loan under this article 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.
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