(a) Installment seller.--An installment seller of a motor vehicle under an installment sale contract executed in this Commonwealth may not sell, transfer or assign the obligation represented by the contract to a person in this Commonwealth or elsewhere unless the person is licensed as a sales finance company under this chapter.
(b) Sales finance company.--A sales finance company licensed under this chapter may not sell, transfer or assign the obligation represented by an installment sale contract executed in this Commonwealth, which it has lawfully acquired, to a person in this Commonwealth or elsewhere unless the person is licensed as a sales finance company under this chapter.
(c) Notice; effect on subsequent holder.--If an installment sale contract is lawfully sold, transferred or assigned to a person who is licensed as a sales finance company under this chapter, the buyer's payment or tender of payment made to and service of notice on the last known holder is binding on a subsequent holder until the new holder furnishes to the buyer a written notice of the sale, transfer or assignment that sets forth the name and address of the new holder authorized to receive future payments on the contract.
(d) Default; notice; effect on subsequent holder.--
(1) If an installment sale contract lawfully acquired by a sales finance company is in default, the holder may resell, retransfer or reassign the contract to the installment seller from whom the contract was originally acquired.
(2) The buyer's payment or tender of payment made to and service of notice on the last known holder is binding on a subsequent holder until the new holder furnishes to the buyer a written notice of the resale, retransfer or reassignment that sets forth the following:
(i) The name and address of the new holder authorized to receive future payments on the contract.
(ii) The unpaid time balance.
(iii) The accrued late charges due under the contract.
(e) Applicability.--
(1) This section does not apply to an assignment of an aggregation of installment sale contracts:
(i) which is executed by a seller or sales finance company only as a security interest securing payment or performance of a bona fide commercial loan, obtained at lawful rates of interest from a person regularly engaged in the business of lending money on the security of the assigned collateral or amounts due pursuant to a security or debt instrument; and
(ii) under which, in the absence of default or other bona fide breach of the loan contract:
(A) ownership of the assigned contracts remains vested in the assignor; and
(B) collection of payments on the assigned contracts is made by the assignor.
(2) An assignment of an aggregation of loan contracts under this section may not be for the purpose of evading or circumventing the provisions of this chapter.
Cross References. Section 6229 is referred to in section 6202 of this title.