MARVIN MANDEL, Governor

403

BALANCES FROM TIME TO TIME.

(3) IF THE LENDER REFINANCES A LOAN IN THE
ORDINARY COURSE OF BUSINESS, HE MAY NOT ADD TO THE
PRINCIPAL BALANCE OR DEDUCT FROM THE PROCEEDS OF THE NEW
LOAN MORE THAN 60 DAYS' INTEREST THEN DUE.

(B) COMPUTATION OF INTEREST.

(1) THE LENDER SHALL COMPUTE INTEREST ON THE
ACTUAL UNPAID PRINCIPAL BALANCES OUTSTANDING FROM TIME TO
TIME, AND HE MAY NOT CONTRACT FOR, CHARGE, OR RECEIVE
INTEREST IN ADVANCE OR COMPOUNDED INTEREST.

(2) FOR EACH DAY ON WHICH AN UNPAID PRINCIPAL
BALANCE IS OUTSTANDING, THE LENDER MAY CHARGE ON THAT
UNPAID BALANCE 1/360TH OF THE INTEREST PERMITTED UNDER
THIS SUBTITLE TO BE CHARGED FOR ONE YEAR. FOR THIS
PURPOSE, EACH OF THE 12 CALENDAR MONTHS IN THE YEAR SHALL
BE TREATED AS HAVING 30 DAYS AS FOLLOWS:

(i) THE LAST DAY OF EACH MONTH WHICH HAS 31
DAYS SHALL BE OMITTED; AND

(ii) THE NECESSARY NUMBER OF DAYS SHALL BE
ADDED AT THE END OF FEBRUARY TO MAKE 30 DAYS.

REVISOR'S NOTE: This section presently appears as
Art. 58A, §16(a) and (b).

Note that §12-201(b) provides that, for the
purpose of this section, "lender" includes a
licensed parent, subsidiary, or affiliate of a
lender.

In subsection (a) of this section, references
to loans "not exceeding $500" are deleted as
unnecessary in light of the provisions of
§12-203 (a) and the definition of "loan" in
§12—201. Paragraph (3) has been revised to
clarify the different methods by which
interest on a refinanced loan might be
charged; for similar language, see present
Art. 58A, §18(c) - now §12-209(a) (4). This
paragraph also substitutes the accepted U.C.C.
terminology "ordinary course of business" for
"due course of business."

In subsections (a)(1) and (b)(2) of this
section, for purposes of uniformity, the word
"charge" is substituted for the inconsistent
phrases "charge, contract for and receive" and
"charge and receive"; the right to charge
obviously presupposes the right to contract