Seeking to preempt a flood of new suits, industry lawyers are urging the federal appeals court in New Orleans to reverse a controversial Truth- in-Lending Act decision.

The ruling last month by a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit found that a company buying a loan from a broker is actually the loan's originator. This means the buyer is liable for any violation of disclosure law made by a broker, even if the error was not readily apparent.

The industry wants the full appeals court to reconsider the ruling. This often is a first step before appeal to the Supreme Court.

The consequences of the current ruling could be enormous, industry lawyers warned. "Bankers should certainly care about this case," said Michael F. Crotty, deputy general counsel for litigation at the American Bankers Association. "If they are buying paper from car dealers, then they could find themselves responsible for disclosure errors that they didn't make."

Steven I. Zeisel, senior counsel at the Consumer Bankers Association, said the industry thought Congress solved this problem in 1980 when it simplified the Truth-in-Lending Act.

Under the revised law, a creditor that buys a loan was only supposed to be liable for violations apparent on the face of a contract. There was no requirement for loan buyers to verify that fees and other items were properly calculated, he said.

"This case could reopen the door for confusion over who is liable for violations in these auto loan situations," Mr. Zeisel said.

Other lawyers were even more pessimistic. David S. Willenzik, a partner in the New Orleans law firm McGlinchey Stafford, said the decision, if upheld, could give nearly every recipient of a car, boat, or furniture loan the right to sue for Truth-in-Lending Act violations.

This is because the law requires the disclosure form to list the correct creditor. For car loans, that slot identifies the creditor as the auto dealer. But under the court's ruling, it is the buyer of the loan that should be listed, said Mr. Willenzik, who wrote a brief on the case for the industry.

"If this case is allowed to stand, then every one of those contracts contains a violation because Truth-in-Lending requires the correct creditor to be identified in the contract," he said. "It is a very bad precedent."

The dispute arose after Stefanie Riviere bought and financed a car at Banner Chevrolet. She charged the dealer with violating the Truth-in- Lending Act. A federal judge dismissed the suit last year, finding that Ms. Riviere should have sued GMAC because it eventually took over the credit. The decision was upheld last month by the appeals court in a one-page ruling.

The banking industry, represented by the ABA, Consumer Bankers Association, American Financial Services Association, and Louisiana Bankers Association, filed a brief last week supporting Ms. Riviere's attempt to revive her suit against the car dealer.

"It is much better if the guy who makes the loan and all of the disclosures and identifies himself as the lender be responsible for disclosure errors that he made," Mr. Crotty said.

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