3870                                   LAWS OF MARYLAND                                Ch. 753

SECTION 6-507 OF THE FINANCIAL INSTITUTIONS ARTICLE, WHICH
CONTAINS A PROVISION THAT PERMITS THE LENDER TO INCREASE OR
DECREASE THE APPLICABLE RATE OF INTEREST OR FINANCE CHARGES
FROM TIME TO TIME DURING THE TERM OF THE OBLIGATION, UNLESS:

(1) THE LOAN IS SECURED BY AN INTEREST IN REAL
PROPERTY;

(2) ANY SUCH PROVISION LIMITS ADJUSTMENTS IN THE
RATE ON AN OBLIGATION AS FOLLOWS:

(I) THE INCREASE AND DECREASE IN THE RATE
IS DETERMINED BY AN OBJECTIVE INDEX WHICH IS NOT DIRECTLY
CONTROLLED BY THE LENDER AND WHICH IS AGREED UPON BY THE
PARTIES TO THE AGREEMENT WHICH IS NOT DIRECTLY CONTROLLED BY
THE LENDER.

(II) THE RATE MAY NOT BE ADJUSTED MORE
FREQUENTLY THAN ONCE IN A 6 MONTH PERIOD.

1. THE AMOUNT OF INCREASE IN ANY 6

MONTH PERIOD MAY NOT BE MORE THAN THE EQUIVALENT OF 1
PERCENTAGE POINT ABOVE THE RATE IN EFFECT PRIOR TO THE RATE
CHANGE.

2. NOTWITHSTANDING SUBPARAGRAPH (I),
IF THE RATE OF CHANGE IN ANY INDEX SO ALLOWS, THE RATE MAY
BE INCREASED TO NOT MORE THAN THE ORIGINALLY CONTRACTED FOR
RATE IF AUTHORIZED BY THE LOAN AGREEMENT. ANY THE AGREED
UPON ADDITIONAL INCREASES MUST COMPLY WITH SUBPARAGRAPH (I).

3. NOTWITHSTANDING SUBPARAGRAPH (I),
THE LENDER MAY DECREASE THE RATE AT ANY TIME AND BY ANY
AMOUNT.

(3) INTEREST RATE DECREASES WARRANTED BY
DECREASES IN THE RELEVANT AGREED UPON INDEX SHALL BE
MANDATORY EXCEPT TO THE EXTENT THAT PAST INCREASES IN THE
INDEX HAVE NOT BEEN IMPLEMENTED BY THE LENDER, EITHER AT HIS
OPTION OR BECAUSE THE LENDER WAS SUBJECT TO THE RATE CHANGE
LIMITATION OF PARAGRAPH (2) OF THIS SECTION.

(4) THE LOAN INSTRUMENT SHALL SPECIFY THE
CIRCUMSTANCES UNDER WHICH THE RATE MAY INCREASE OR DECREASE,
ANY LIMITATIONS ON AN INCREASE OR DECREASE, AND THE EFFECTS
OF AN INCREASE OR DECREASE.

(5) A LENDER MUST ALLOW THE BORROWER THE CHOICE
OF IMPLEMENTING THE VARIABLE RATE FEATURE OF THE LOAN EITHER
BY CHANGES IN THE AMOUNT OF PERIODIC PAYMENTS OR BY
EXTENDING OR REDUCING THE LENGTH OF THE TERM OF THE
OBLIGATION;

(6) THROUGH A PERIODIC BILLING STATEMENT OR
OTHER WRITTEN NOTICE, THE BORROWER IS NOTIFIED OF THE BASIS