HARRY HUGHES, Governor

601

In items (3) and (4) of this section, the words
"in connection with" are substituted for the
phrase "in aid of" for clarity.

The first sentence of present Art. 66, § 41,
which states that no person except for a
financial institution subject to certain other
laws may "sake or negotiate, or offer to make or
negotiate, any secondary mortgage loan except
under the provisions of this subtitle" is deleted
as unnecessary and potentially misleading. The
substantive prohibition repeats the one contained
in CL § 12-412 and, therefore, is unnecessary.
The exception implies that any financial
institution whose power to engage in mortgage
loan transactions is regulated by any other law
of this State or of the United States is exempted
completely from the Maryland Secondary Mortgage
Loan Law. This implication is misleading. The
prohibition in CL § 12—112 applies to a "lender",
which, as defined in CL § 12—401(c), covers both
a licensee and a person who is exempted expressly
from the licensing requirements of this subtitle.
The intent of the reference to regulated
financial institutions is to exempt then only
from additional licensing provisions.

Therefore, the second sentence of present Art.
66, § 41(3), which indicates that persons who
make less than ten secondary mortgage loans a
year nay not charge interest that exceeds the
limits of the Maryland Secondary Mortgage Loan
Law — Credit Provisions, is deleted as
unnecessary. As persons expressly exempted from
licensing, these persons are within the defined
term "lender" in CL § 12-401.

While the former law might be interpreted to the
effect that these loans are subject to other
credit provisions, it is clear that these
exempted persons are lenders under the Maryland
Secondary Mortgage Loan Law and, as such, are
subject to the credit provisions of that law when
making second mortgage loans. See Schmidt v.
Beneficial Finance Co., 42 Md. App. 148, 159
(1979).

12-303. RULES AND REGULATIONS.

THE BANK COMMISSIONER MAY ADOPT RULES AND REGULATIONS
TO CARRY OUT THE PROVISIONS OF THIS SUBTITLE.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 66, § 70.

12-304. LICENSE REQUIRED.