1292

LAWS OF MARYLAND

Ch. 386

(a)  In a closed end account, the finance charge may
not exceed the greater of:

(1)   [The sum of] SIMPLE INTEREST AT AN ANNUAL
RATE NOT EXCEEDING AN AMOUNT COMPUTED USING THE FOLLOWING
ANNUAL SIMPLE INTEREST RATES OF FINANCE CHARGE:

(i) [$12 per $100 per year] 22 PERCENT on
that part of the [principal] OUTSTANDING balance not
exceeding $1,000; and

(ii) [$10 per $100 per year] 18 PERCENT on
that part of the [principal] OUTSTANDING balance exceeding
$1,000; or

(2)  A minimum charge of $10 or, if the due date
of the last installment is eight months or less after the
effective date of the retail credit account agreement, $8.

(b)   (1) In a closed end account, notwithstanding the
fact that the unpaid principal balance is payable in
installments, the finance charge shall be computed on the
principal balance due in connection with each purchase from
the date of the purchase, except as provided in § 12-504 (b)
with respect to goods or services in excess of $200, until
the due date of the final installment.

[(2) The amount of the maximum finance charge
permitted by this section shall be decreased or increased
proportionately if the principal balance due in connection
with a purchase under a closed end account is payable in
successive installments substantially equal in amount:

(i) For a period other than a year; or

(ii) For amounts other than $100.]

(2) THE LENDER SHALL COMPUTE THE FINANCE CHARGE
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.

(3) If a closed end account provides for either
unequal or irregular installment payments, the finance
charge may be at a rate which will provide the same yield as
is permitted under this section for accounts which provide
for equal and regular installment payments. THE FINANCE
CHARGE MAY BE COMPUTED:

(I)      ON THE ACTUAL UNPAID PRINCIPAL
OUTSTANDING FROM TIME TO TIME; OR

(II)      IN ADVANCE, AT THE TIME THE PURCHASE
IS MADE, BY ADDING TO THE ORIGINAL UNPAID BALANCE THE AMOUNT
OF FINANCE CHARGE THAT WOULD BE EARNED IF THE ACCOUNT WERE
REPAID EXACTLY ACCORDING TO ITS TERMS AT THE RATE STATED IN
SUBSECTION (A) OF THIS SECTION.