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FTC Holder Rule --16 C.F.R. § 433.2(a)

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In Wait v. Roundtree Mobile, LLC, 2015 WL 6964668, at *8-9 (S.D.Ala., 2015), Judge Granade  granted summary judgment to an auto finance company under the FTC Holder Rule. In the motion for summary judgment, BMW claims that “[b]oth the FTC Holder Rule as well as the explicit terms of the Contract provide that recovery by the Debtor shall not exceed amounts paid… Read More

In Lafferty v. Wells Fargo Bank, 2015 WL 1383659 (Cal.App. 3 Dist. 2015), the California Court of Appeal found the FTC Holder Rule did not deprive a holder of a RISC of the opportunity to defend itself merely because the automobile purchaser had obtained a default judgment against the selling dealer. The Laffertys argue they are necessarily already the prevailing party because… Read More

In Wales v. Arizona RV Centers, LLC, 2015 WL 137260 (E.D.La. 2015), Judge Lamelle explained the scope of the FTC Holder Rule's "Claims and Defenses" language in connection with the sale of a defective RV. As the foregoing reveals, Defendant's contentions as to the ability of buyers to assert affirmative claims against lenders under the FTC Holder Rule are contradicted by the… Read More

In Mercer v. Tumbleson Automotive Group, 2013 IL App (3d) 120400-U, 2013 WL 827716 (Ill.App. 3 Dist. 2013), Judge O’Brien found that a Holder of an automobile RISC was not subject to the Holder Rule for the misconduct of a seller. The facts were as follows: In May 2009, plaintiff Terry Mercer executed a retail installment contract with Taylor &… Read More

In Lafferty v. Wells Fargo Bank, --- Cal.Rptr.3d ----, 2013 WL 412900 (2013), the Court of Appeal found that the FTC Holder Rule was not defensive in nature only, and that a consumer can assert affirmative ‘claims and defenses’ against the Holder, as the FTC’s May 3, 2012 Advisory Opinion also held. The Holder Rule unambiguously allows the buyer to… Read More

The Federal Trade Commission has issued an advisory affirming consumers' rights under the FTC's Holder Rule which protects the rights of consumers who make a purchase using credit obtained through the merchant.  The Rule, formally known as the "Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses," protects consumers when merchants sell a consumer's credit contracts to other lenders. Specifically, it… Read More

In Medina v. Performance Automotive Group, Inc.,  2012 WL 219308 (E.D.Cal. 2012), Judge Karlton remanded to state court a class action alleging that a car dealer illegally ‘backdated’ retail installment contracts.  The defendant finance company had removed the matter to federal court, and then moved to compel arbitration (and the class action waiver) under Concepcion.   Judge Karlton found that neither… Read More

In Sixto Ramirez, Plaintiff–Appellant, v. National Cooperative Bank -- N.Y.S.2d ----, 2011 WL 6032399 (N.Y.A.D. 1 Dept. 2011), Judge Catterson found an assignee liable for common law fraud claims arising out of an automobile sale under the FTC and NY Holder Rules: In its decision and order dated August 3, 2010, the motion court granted NCB's motion. While not explicitly… Read More

As part of its ongoing efforts to ensure that auto dealers’ financing practices comply with federal consumer protection laws, the Federal Trade Commission has completed investigations of nearly 50 automobile dealers across the country to assess their compliance with the FTC’s Rule Concerning Preservation of Consumers’ Claims and Defenses, more commonly known as the “Holder in Due Course” Rule. The… Read More

In a decision deemed unpublishable, the Fourth District Court of Appeal in Mid-Century Ins. Co. v. Vinci Investment Company, Inc., 2010 WL 673267 (2010) that a claim brought by a credit union against a car dealer with whom it did business asserting wrongdoing in the assignment of retail installment sales contracts for automobiles might be covered by the dealer's insurance policy. … Read More

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