Congress has not enacted legislation addressing clauses such as the clause at issue in this case.  However, such clauses have been the subject of state legislation.  Some states have adopted legislation based upon or similar to the following provision (section 3.303(1)) of the Uniform Consumer Credit Code: 

If debts arising from two or more consumer credit sales, . . . are secured by cross collateral (Section 3.302) or consolidated into one debt payable on a single schedule of payments, and the debt is secured by security interests taken with respect to one or more of the sales, payments received by the seller after the taking of cross-collateral or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of the debts arising from the sales first made. To the extent debts are paid according to this section, security interests in items of property terminate as the debt originally incurred with respect to each item is paid.

     What effect would such legislation have had on the contracts signed by Mrs. Williams? 

     The Uniform Consumer Credit Code ("U3C"), like the Uniform Commercial Code, was a project of the National Conference of Commissioners on Uniform State Laws.  The National Conference promulagated the U3C in 1968.  Nine states have adopted the U3C.  While thus not as successful as the Uniform Commercial Code, other states have adopted consumer protection statutes with content addressing some of the same issues addressed by the U3C.  

     California has not adopted the U3C.   However, it does extensively regulate retail installment sales of consumer goods in legislation known as the Unruh Act.  Cal. Civ. Code 1801 et. seq.  Consider the following excerpts from sections 1808.1 and 1808.2 of the Unruh Act:

1808.1.  . . .  The contract may . . . provide that the goods purchased under the previous contract or contracts shall be security for the goods purchased under the subsequent contract but only until such time as the total of payments under the previous contract or contracts is fully paid. 

1808.2.  When a subsequent purchase is made, the entire amount of all payments made prevous thereto shall be deemed to have been applied toward the payment of the previous deferred payment price or deferred payment prices.  Each payment thereafter received shall be deemed to be allocated to all of the various deferred payment prices in the same proportion or ration as the original cash sale prices of the various purchases bear to one another; . . .

     What effect would such legislation have had on the contracts signed by Mrs. Williams?