Liabilities
Unless the contractual agreement states otherwise, the assignee typically does not receive greater rights than the assignor, and the assignor may remain liable to the original counterparty for the performance of the contract. The assignor often delegates duties in addition to rights to the assignee.
However, in the United States there are various laws which limit the liability of the assignee, often in order to facilitate credit, since assignees are typically lenders. Notable examples include a provision in the Truth in Lending Act and provisions in the Consumer Leasing Act and the Home Ownership Equity Protection Act.
In other cases, the assignee may be a holder in due course, in which case issues such as lack of performance by the assignor may not be a valid defense for the obligor. As a response to this, the United States Federal Trade Commission promulgated Rule 433, formally known as the "Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses", which "effectively abolished the doctrine in consumer credit transactions". In 2012, the FTC reaffirmed the regulation.
Read more about this topic: Assignment (law)
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