Basic Uniform Commercial Code

Unfair Credit Practice

16 CFR § 444.2
  1. ... [I]t is an unfair act or practice ... for a lender or retail installment seller directly or indirectly to take or receive from a consumer an obligation that:
    1. Constitutes or contains a cognovit or confession of judgment (for purposes other than executory process in the State of Louisiana), warrant of attorney, or other waiver of the right to notice and the opportunity to be heard in the event of suit or process thereon.
    2. Constitutes or contains an executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held, owned by, or due to the consumer, unless the waiver applies solely to property subject to a security interest executed in connection with the obligation.
    3. Constitutes or contains an assignment of wages or other earnings unless:
      1. The assignment by its terms is revocable at the will of the debtor, or
      2. The assignment is a payroll deduction plan or preauthorized payment plan, commencing at the time of the transaction, in which the consumer authorizes a series of wage deductions as a method of making each payment, or
      3. The assignment applies only to wages or other earnings already earned at the time of the assignment.
    4. Constitutes or contains a nonpossessory security interest in household goods other than a purchase money security interest.
Household Good
16 CFR § 444.1(i)
  1. Clothing, furniture, appliances, one radio and one television, linens, china, crockery, kitchenware, and personal effects (including wedding rings) of the consumer and his or her dependents, provided that the following are not included within the scope of the term household goods:
    1. Works of art;
    2. Electronic entertainment equipment (except one television and one radio);
    3. Items acquired as antiques; and
    4. Jewelry (except wedding rings).
Purchase-Money Security Interest
UCC § 9-103(b)
  1. A security interest in goods is a purchase-money security interest:
    1. to the extent that the goods are purchase-money collateral with respect to that security interest;
    2. if the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase- money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and
    3. also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.
Purchase-Money Collateral
UCC § 9-103(a)(1)

"purchase-money collateral" means goods or software that secures a purchase-money obligation incurred with respect to that collateral; and

Purchase-Money Obligation
UCC § 9-103(a)(2)

"purchase-money obligation" means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.

You have to have an obligation to use the money in that way.

TL;DR: Someone gave you money to buy something, and you used the money to buy it.

Purchase-money security interests in goods other than inventory or livestock take over previously-filed security interests as long as the PMSI perfects within 20 days of the purchaser taking possession. UCC § 9-324(a).

Sellers with PMSIs prevail over lenders with PMSIs.