Section 338. Security interest prohibited

1. No retail lease agreement, or
  any other agreement executed by  the  lessee  in  connection  therewith,
  shall provide for the creation of a security interest in any personal or
  real  property  of  the lessee to secure the payment of the debt arising
  from the lease.  This prohibition shall not apply to: (a) the taking  of
  a security deposit, advance payment of rent or other prepayment by cash,
  check  or  similar  means;  (b)  the  retention or exercise by a banking
  organization of a right of set off; or (c) the retention of  a  security
  interest  in  the  proceeds, cancellation refunds or other rights of the
  lessee under any insurance, repair or service  contract  whose  cost  is
  included in the total monthly lease payment.
    2.  A  security  interest  taken in violation of this section shall be
  void but shall not otherwise affect  the  validity  of  a  retail  lease
  agreement.