New York Consolidated Laws, General Business Law - GBS § 253. Consumer defenses

A creditor, who made a consumer loan the proceeds of which were primarily used in a consumer sale, shall be subject to all of the defenses of a consumer arising from such consumer sale, provided that the creditor knowingly participated in or was directly connected with such consumer sale.  The creditor's liability under this article shall not exceed the amount owing to the creditor at the time the defenses of the consumer are asserted against the creditor.  Rights of the consumer under this article can only be asserted as a matter of defense to or set-off against a claim by the creditor.  The creditor shall be subrogated to the rights of the consumer arising from the consumer sale and shall have recourse against the seller to the extent of any liability incurred by the creditor pursuant to this article.