Consumer Credit Regulation: 14.3.3 Relationship Between Lender and the Original Obligor
Some courts find persuasive evidence that a transaction is actually a disguised loan where the lender collects payments from the borrower, rather than directly collecting the income stream supposedly purchased from the original obligor.28 The “salary buyers” of the early 20th century often structured transactions in this way: they would “purchase” a borrower’s next pay packet at a discount and have the borrower execute documents purporting to assign the right to collect the wages of the original obligor.29