MARVIN MANDEL, Governor

407

ADDITION TO ANY OTHER CLAIM OR DEFENSE WHICH THE BORROWER
HAS UNDER THIS SUBTITLE, THE LENDER IS SUBJECT TO THE
CLAIMS AND DEFENSES OF THE BORROWER AGAINST THE SELLER
ARISING FROM THE SALE OF THE GOODS OR SERVICES, IF:

(1)   THE LENDER KNOWS THAT THE SELLER ARRANGED
FOR THE EXTENSION OF CREDIT BY THE LENDER; OR

(2)      THE LENDER OTHERWISE KNOWINGLY
PARTICIPATED IN THE SALE.

(B)   DETERMINATION OF KNOWING PARTICIPATION IN SALE.

IN DETERMINING THAT A LENDER KNOWINGLY PARTICIPATED
IN A SALE TRANSACTION, THE FOLLOWING FACTORS, AMONG
OTHERS, MAY BE CONSIDERED:

(1)   THE LENDER WAS A PERSON RELATED TO THE
SELLER, UNLESS THE RELATIONSHIP WAS REMOTE OR WAS NOT A
FACTOR IN THE SALE OR LOAN;

(2)    THE PROCEEDS OF THE LOAN WERE MADE
PAYABLE IN WHOLE OR IN PART TO THE SELLER;

(3)   THE LENDER TOOK A PURCHASE-MONEY SECURITY
INTEREST IN THE GOODS WHICH ARE THE SUBJECT OF THE SALE;

(4)    THE SELLER GUARANTEED THE LOAN OR
OTHERWISE ASSUMED THE RISK OF LOSS BY THE LENDER ON THE
LOAN;

(5)    THE LENDER DIRECTLY SUPPLIED TO THE
SELLER A FORM USED BY THE BORROWER TO EVIDENCE OR SECURE
THE LOAN; OR

(6)   THE LOAN WAS CONDITIONED ON PURCHASE BY
THE BORROWER OF THE GOODS OR SERVICES FROM THE PARTICULAR
SELLER, BUT THE PAYMENT BY THE LENDER OF ANY PROCEEDS OF
THE LOAN TO THE SELLER DOES NOT ESTABLISH IN ITSELF THAT
THE LOAN WAS SO CONDITIONED.

(C)   EXTENT OF LENDER'S LIABILITY.

(1)    THE LIABILITY OF A LENDER UNDER THIS
SECTION MAY NOT EXCEED THE AMOUNT OWED TO THE LENDER WITH
RESPECT TO THE SALE AT THE TIME THE LENDER HAS NOTICE OF
A CLAIM OR DEFENSE OF THE BUYER AGAINST THE SELLER.

(2)    IF TWO OR MORE LOANS ARE CONSOLIDATED,
THE MAXIMUM AMOUNT OWED TO THE LENDER UNDER PARAGRAPH (1)
OF THIS SUBSECTION IS DETERMINED AS FOLLOWS:

(i) IF THE CONSOLIDATED LOANS AROSE FROM
SALES MADE ON THE SAME DAY, THE PAYMENTS RECEIVED AFTER