§ 12-903. Collecting interest or finance charges
West's Annotated Code of MarylandCommercial Law
MD Code, Commercial Law, § 12-903
§ 12-903. Collecting interest or finance charges
(a)(1) A credit grantor may charge and collect interest or finance charges under the plan on the outstanding unpaid indebtedness in the borrower's account under the plan at any daily, weekly, monthly, annual, or other periodic percentage rate as the agreement governing the plan provides, if the effective rate of simple interest does not exceed 24 percent per year. The rate of interest chargeable on a plan must be expressed in the agreement as a simple interest rate or rates.
(2) The repayment terms for a plan extended to a consumer borrower may not include a provision under which the consumer borrower may be required to pay a balloon payment at maturity. However, the adjustment of payment amounts, due to fluctuations in unpaid balance or rate of interest, may not be deemed to result in a balloon payment.
(3) If the plan is secured by a lien on residential real property, the credit grantor may, in addition to the periodic percentage rate charge authorized under subsection (a)(1) of this section, charge and collect at the time the plan is entered into by the borrower points, loan origination fees, loan discount fees, and similar fees, provided that:
(iv) The fees are disclosed to the borrower in accordance with the federal Truth in Lending Act.1
(b) With respect to a revolving credit plan of a consumer borrower, interest may be calculated on an amount not in excess of the average of the outstanding unpaid indebtedness for the applicable billing period, determined by dividing the total of the amounts of outstanding unpaid indebtedness for each day in the applicable billing period by the number of days in the billing period, or on an amount calculated by another balance computation method specified in the agreement.
(i) If the outstanding balance of purchase obligations under an open-end credit plan is paid in full within 25 days after the end of a prior billing period, a finance charge or interest may not be imposed on a consumer borrower with respect to such balance for the period from the end of the prior billing period to the date of the payment in full; and
(ii) If there is no purchase balance at the beginning of a current billing period or if full payment of an outstanding balance from a prior billing period is made under subparagraph (i) of this paragraph within 25 days after the end of the prior billing period, a finance charge or interest may not be imposed on a consumer borrower with respect to any purchase obligation added to the account during the current billing period from the date of purchase to the end of the current billing period.
Credits
Added by Acts 1983, c. 143, § 1, eff. July 1, 1983. Amended by Acts 1984, c. 255; Acts 1988, c. 614; Acts 1997, c. 588, § 1, eff. Oct. 1, 1997; Acts 1998, c. 760, § 1, eff. Oct. 1, 1998; Acts 1998, c. 761, § 1, eff. Oct. 1, 1998.
Footnotes
Pub.L. 90-321, Title I, May 29, 1968, 82 Stat. 146, codified at 15 U.S.C.A. § 1601 et seq.
MD Code, Commercial Law, § 12-903, MD COML § 12-903
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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