537.3404 Assignee subject to claims and defenses. 1. With respect to a consumer credit sale or consumer lease, an assignee of the rights of the seller or lessor is subject to all claims and defenses of the consumer against theseller or lessor arising from the sale or lease of property or services, notwithstanding thatthe assignee is a holder in due course of a negotiable instrument issued in violation ofthe provisions prohibiting certain negotiable instruments in section 537.3307; unless theconsumer has agreed in writing not to assert against an assignee a claim or defense arisingout of such sale, and the consumer’s contract has been assigned to an assignee not relatedto the seller who acquired the consumer’s contract in good faith and for value and whogives the consumer notice of the assignment as provided in this subsection and who withinthirty days after the mailing of the notice receives no written notice of the facts giving riseto the consumer’s claim or defense. Such agreement not to assert a claim or defense is notvalid if the assignee receives such written notice from the consumer within such thirty-dayperiod. giving riseto the consumer’s claim or defense. Such agreement not to assert a claim or defense is notvalid if the assignee receives such written notice from the consumer within such thirty-dayperiod. The notice of assignment shall be in writing and addressed to the consumer at theconsumer’s address as stated in the contract, identify the contract, describe the propertypurchased by the consumer, state the names of the seller and consumer, the name andaddress of the assignee, the amount payable by the consumer and the number, amountsand due dates of the installments, and contain a conspicuous notice to the consumer thatthe consumer has thirty days from the date of the mailing of the notice to the consumerwithin which to notify the assignee in writing of any claims or defenses the consumer mayhave against the seller and that if written notification of any such claims or defenses is notreceived by the assignee within such thirty-day period, the assignee will have the right toenforce the contract free of any claims or defenses the consumer may have against the seller.An assignee does not acquire a consumer’s contract in good faith within the meaning ofthis subsection if the assignee contract free of any claims or defenses the consumer may have against the seller.An assignee does not acquire a consumer’s contract in good faith within the meaning ofthis subsection if the assignee has knowledge or, from the assignee’s course of dealing withthe seller or the assignee’s records, notice of substantial complaints by other consumers ofthe seller’s failure or refusal to perform the seller’s contracts with them and of the seller’sfailure to remedy the seller’s defaults within a reasonable time after the assignee notifies theseller of the complaints. 2. A claim or defense of a consumer specified in subsection 1 may be asserted against the assignee under this section only if the consumer has made a good faith attempt to obtainsatisfaction from the seller or lessor with respect to the claim or defense, and only to theextent of the amount owing to the assignee with respect to the sale or lease of the propertyor services as to which the claim or defense arose, at the time the assignee has notice of theclaim or defense. Notice of the claim or defense may be given prior to the attempt specifiedin this subsection. Written notice is effective when mailed or delivered. 3. the assignee has notice of theclaim or defense. Notice of the claim or defense may be given prior to the attempt specifiedin this subsection. Written notice is effective when mailed or delivered. 3. For the purpose of determining the amount owing to the assignee with respect to the sale or lease: a. Payments received by the assignee after the consolidation of two or more consumer credit sales, other than pursuant to open-end credit, are deemed to have been first applied tothe payment of the sales first made, and if the sales consolidated arose from sales made onthe same day, payments are deemed to have been first applied to the smaller or smallest saleor sales. b. Payments received upon an open-end credit account are deemed to have been first applied to the payment of finance charges in the order of their entry to the account and thento the payment of debts in the order in which the entries of the debts are made to the account. 4. Except as provided in section 537.1107, an agreement may not contain a provision to limit or waive the claims or defenses of a consumer under this section. A provision in violationof this subsection is unenforceable. d in section 537.1107, an agreement may not contain a provision to limit or waive the claims or defenses of a consumer under this section. A provision in violationof this subsection is unenforceable. [C75, 77, 79, 81, §537.3404]2018 Acts, ch 1041, §127Referred to in §537.5201 Sat Dec 23 01:40:30 2023 Iowa Code 2024, Section 537.3404 (20, 0)
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