No area of consumer protection has produced as much near religious ferment in recent years as that collection of rules which insulate third party financers from product-related claims or defenses of consumer purchasers. Courts, legislatures, agencies, commissions, and commentators 6 have assailed the holder in due course idea from all directions, so far as its application in consumer transactions is concerned. The cloud of rhetoric thus raised has tended to obscure the complexity of the subject, state only imperfectly the significant considerations, and oversimplify the appropriate legal responses. Moreover, the focus of much of this recent discussion has been on traditional notions of holder in due course. There are now important new developments in the form of the recommendations of the National Commission on Consumer Finance, a completely redrafted 1974 Uniform Consumer Credit Code, a new Model Consumer Credit Act drafted by the National Consumer Law Center, the possibly imminent promulgation of a holder in due course Trade Regulation Rule by the Federal Trade Commission, and, most recently, the enactment of a federal statute limiting holder in due course application in credit card transactions.This Article takes up the changing shape of the holder in due course controversy and outlines grounds for consensus as to future legislative policy.
Ralph J. Rohner, Holder in Due Course in Consumer Transactions: Requiem, Revival, or Reformation?, 60 CORNELL L. REV. 503 (1975).