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Subdivision 1.Instruments.
In a consumer credit sale, the seller or lessor may not take a negotiable instrument other than a check as evidence of the obligation of the buyer or lessee. A holder is not in good faith if the holder takes a negotiable instrument with notice that it is issued in violation of this section.
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Subd. 2.Provision restrictions.
No contract or obligation relating to a consumer credit sale shall contain any provision by which:
(a) the consumer agrees not to assert against an assignee any claim or defense arising out of the transaction;
(b) in the absence of consumer's default, the holder may arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the amount owing thereunder;
(c) a power of attorney is given to confess judgment in this state, or an assignment of wages is given;
(d) the seller or holder of the contract or obligation, or a person acting on the seller's or holder's behalf, is given authority to enter upon the consumer's premises unlawfully or to commit any breach of the peace in the repossession of the goods;
(e) the consumer waives any right of action against the seller or holder of the contract or obligation, or any other person acting on the seller's or holder's behalf, for any illegal act committed in the collection of payments under the contract or obligation or in the repossession of goods;
(f) the consumer relieves the seller from any liability for any legal remedy which the consumer may have against the seller under the contract or obligation or any separate instrument executed in connection therewith.
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Subd. 3.Claims and defenses.
Any assignee of the contract or obligation relating to the consumer credit sale shall be subject to all claims and defenses of the consumer against the seller arising from the sale, notwithstanding any agreement to the contrary. Provided, however, that the assignee's liability under this subdivision shall not exceed the amount owing to the assignee at the time the claim or defense is asserted against the assignee. The rights of the consumer under this subdivision can only be asserted as a matter of defense to or set off against a claim by the assignee.
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Subd. 4.Interest retained by bailor or lessor.
Any lease or bailment of goods which constitutes a consumer credit sale shall be deemed to be a sale for all purposes. The interest retained by the bailor or lessor in any such transaction shall be a security interest only.
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Subd. 5.Mandatory provision.
All contracts or obligations in the form of terminable bailment or lease of goods relating to consumer credit sales shall specify whether the goods which are the subject of the sale are new or used.
Notes of Decisions
Fogie v. Rent-A-Ctr., Inc., 867 F. Supp. 1398 (D. Minnesota 1993).
· cites it 7× “44, consumer protection statutes, Minn. Stat. § 325G.16, subd. 4, 336.2-201, .”
Beemus v. Interstate Nat'l Dealer Servs., Inc., 823 A.2d 979 (Pa. Super. Ct. 2003).
· cites it 2× “(quoting Minn.Stat. § 325G.16, subd. 3 (1998)). [4] Moreover, since federal regulations mandate inclusion of the FTC Holder Rule notice in consumer credit contracts, reference to the FTC Statement for additional limiting language would be tantamount to a violation of the parol…”
Miller v. Colortyme, Inc., 504 N.W.2d 258 (Minn. Ct. App. 1993).
· cites it 8× “Minn.Stat. § 325G.16, subd. 4. 4 The RPAA also requires disclosure that the property is either new or used but can disclose the property as used if it is in fact new.”
Miller v. Colortyme, Inc., 518 N.W.2d 544 (Minn. 1994).
· cites it 2× “Minn.Stat. § 325G.16, subd. 4 provides that “[a]ny lease or bailment of goods which constitutes a consumer credit sale shall be deemed to be a sale for all purposes.”
ADT Sec. Servs., Inc. v. Swenson, 276 F.R.D. 278 (D. Minnesota 2011).
· cites it 2× “Counterclaimants also cite Minnesota’s Consumer Credit Sales Act, see Minn.Stat. § 325G.16(2)(f), but fail to explain how the purchase of an ADT security system was a consumer credit sale.”
Fogie v. Thorn Americas, Inc., 95 F.3d 645 (8th Cir. 1996).
“Minn.Stat. 325G.16 subd. 4. 31 RAC contends that their rental purchase agreements, though statutorily defined as "sales", cannot be "consumer credit sales" because the seller does not extend credit and the buyer does not incur debt.”
In Re DEF Investments, Inc., 186 B.R. 671 (Bankr. D. Minn. 1995).
“15, rather than lease agreements, and therefore sales for all purposes under § 325G.16 in violation of the state’s usury law.”
Starks v. Rent-a-Ctr., 58 F.3d 358 (8th Cir. 1995).
“44 and § 325F.69, and unconscionable marketing in violation of Minn.”
Ann M. LaBarre v. Credit Acceptance, 175 F.3d 640 (8th Cir. 1999).
“” Minn. Stat. § 325G.16, subd. 3 (1998). Thus limited, LaBarre could not affirmatively bring these state law causes of action against CAC as the assignee of the dealer.”
Vickie Fogie v. Thorn Americas, 95 F.3d 645 (8th Cir. 1996).
“Minn.Stat. 325G.16 subd. 4. RAC contends that their rental purchase agreements, though statutorily defined as “sales”, cannot be “consumer credit sales” because the seller does not extend credit and the buyer does not incur debt.”
— Minn. Stat. § 325G.16(2)(f) — 1 case
ADT Sec. Servs., Inc. v. Swenson, 276 F.R.D. 278 (D. Minnesota 2011).
“Counterclaimants also cite Minnesota’s Consumer Credit Sales Act, see Minn.Stat. § 325G.16(2)(f), but fail to explain how the purchase of an ADT security system was a consumer credit sale.”
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