Massachusetts General Laws
Chapter 255 - Mortgages, Conditional Sales and Pledges of Personal Property, and Liens Thereon
Section 12f - Creditors in Consumer Loan Transactions; Defenses of Borrower

Section 12F. As used in this section the following words shall, unless the context requires otherwise, have the following meanings:
''Organization,'' a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.
''Person related to,'' with respect to an individual means (a) the spouse of the individual, (b) a brother, brother-in-law, sister, or sister-in-law of the individual, (c) an ancestor or lineal descendant of the individual or his spouse, and (d) any other relative, by blood or marriage, of the individual or his spouse who shares the same home with the individual.
''Person related to,'' with respect to an organization means (a) a person directly or indirectly controlling, controlled by or under common control with the organization, (b) an officer or director of the organization or a person performing similar functions with respect to the organization or to a person related to the organization, (c) the spouse of a person related to the organization, and (d) a relative by blood or marriage of a person related to the organization who shares the same home with him.
A creditor in consumer loan transactions shall be subject to all of the defenses of the borrower arising from the consumer sale or lease for which the proceeds of the loan are used, if the creditor knowingly participated in or was directly connected with the consumer sale or lease transaction.
Without limiting the scope of the preceding paragraph, a creditor shall be deemed to have knowingly participated in or to have been directly connected with a consumer sale or lease transaction if: (a) he was a person related to the seller or lessor; (b) the seller or lessor prepared documents used in connection with the loan; (c) the creditor supplied forms to the seller or lessor which were used by the consumer in obtaining the loan; (d) the creditor was specifically recommended by the seller or lessor to the borrower and made two or more loans in any calendar year, the proceeds of which are used in transactions with the same seller or lessor, or with a person related to the same seller or lessor; or (e) the creditor was the issuer of a credit card which may be used by the consumer in the sale or lease transaction as a result of a prior agreement between the issuer and the seller or lessor.

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