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FTC RIN: 3084-AB16 Publication ID: Spring 2009 
Title: ●Preservation of Consumers' Claims and Defenses ("Holder-in-Due Course Rule") 
Abstract: Issued in 1975, the Holder-in-Due Course Rule requires sellers to insert language into consumer credit contracts that preserve any claims and defenses that consumers might have against the seller. The Commission promulgated the rule after concluding that the use of certain credit transactions to foreclose consumer claims and defenses arising from credit sale transactions was an unfair practice. This rule eliminated the holder-in-due course doctrine as a legal defense for separating the consumer's obligation to pay from the seller's duty to perform. The Rule specifically requires sellers entering into "consumer credit contracts" or accepting the proceeds of "purchase money loans" to ensure that sales finance contracts and loan contracts contain one of two clauses that preserve the buyer's right to assert against any "holder" of the credit contract the sales-related claims and defenses that the buyer may have against the seller. During fall 2009, the Commission plans to request comments on the rule as part of the Commission's systematic review of all current Commission rules and guides. Staff plans to recommend that the Commission seek comments on, among other things, the economic impact and benefits of this rule; possible conflict between the rule and State, local, or other Federal laws or regulations; and the effect on the rule of any technological, economic, or other industry changes. 
Agency: Federal Trade Commission(FTC)  Priority: Substantive, Nonsignificant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Prerule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 16 CFR 433   
Legal Authority: 15 USC 45 et seq   
Legal Deadline:  None
Timetable:
Action Date FR Cite
ANPRM  09/00/2009    
Regulatory Flexibility Analysis Required: No  Government Levels Affected: Undetermined 
Small Entities Affected: Businesses, Governmental Jurisdictions, Organizations  Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Related RINs: Related to 3084-AA08 
Agency Contact:
Ronald G. Isaac
Attorney
Federal Trade Commission
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW,
Washington, DC 20580
Phone:202 326-3231
Email: risaac@ftc.gov