HARRY HUGHES, Governor

3503

Open End Retail Credit Accounts - Membership-Fees
Prohibited Charges

FOR the purpose of including prohibiting certain fees or
charges in connection with open end retail credit
accounts within the meaning of a finance charge; and
generally relating to open end accounts and credit
cards.

BY repealing and reenacting, with amendments, adding to

Article - Commercial Law
Section 12-506(a) 12-506(h)
Annotated Code of Maryland
(1975 Volume and 1980 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article - Commercial Law

12-506.

(a) In an open end account, the finance charge:

(1) [may] MAYnot be more than:

[(1)](I) 1.5 percent a month on that part of
the outstanding balance THAT IS not MORE THAN [exceeding]
$700; and

[(2)] (II) 1 percent [per] A month on that part
of the outstanding balance [exceeding] THAT IS MORE THAN
$700[.]; AND

(2) INCLUDES ANY TRANSACTION FEE, MEMBERSHIP
FEE, OR OTHER FEE FOR THE PRIVILEGE OF PARTICIPATING IN A
CREDIT CARD PLAN.

(H)(1) A SELLER OR FINANCIAL INSTITUTION THAT IMPOSES
A FINANCE CHARGE IN CONNECTION WITH AN OPEN END ACCOUNT MAY
NOT DIRECTLY OR INDIRECTLY CONTRACT FOR, CHARGE, OR RECEIVE
FROM THE BUYER ANY FINANCE CHARGE, MEMBERSHIP, OR OTHER FEE,
DISCOUNT, FINE, COMMISSION, CHARGE, BROKERAGE, OR OTHER
CONSIDERATION ON THAT ACCOUNT IN EXCESS OF THAT PERMITTED BY
THIS SECTION.

(2) IF A CREDIT CARD PLAN ALLOWS FOR BOTH
PURCHASES AND THE EXTENSION OF CASH ADVANCES, THE CHARGES
PROHIBITED BY THIS SECTION MAY NOT BE IMPOSED AS TO EITHER
FUNCTION.