HARRY HUGHES, Governor                                     1745

(a) (1) Except as provided in subsections (b), (c), (d),
(e), and (f) of this section, a lender may charge interest at an
effective rate of simple interest not in excess of 8 percent per
year on the unpaid principal balance of a loan if there is a
written agreement signed by the borrower which sets forth the
stated rate of interest charged by the lender.

(2)  If a loan made under paragraph (1) of this
subsection is secured by the pledge of collateral which is a
certificate of deposit held by the borrower, the lender may
charge interest at a rate not to exceed 2 percent in excess of
the rate of interest payable on the certificate of deposit.

(3)  If a loan made under paragraph (1) of this
subsection is secured by the pledge of collateral which is other
than a savings account or if such loan is unsecured, [the
lender may charge a rate of interest not in excess of 18 percent.
However, on a loan made on or after July 1, 1982, [and before
July 1, 1985,] a lender may charge an effective rate of simple
interest not in excess of 24 percent per year on the unpaid
principal balance, provided that:

(i) If the loan is a renewal or refinancing of
a loan made prior to July 1, 1982, the lender complies with
Section 12-116 of this subtitle;

(ii) If the loan includes a provision for a
rate of interest which may be adjusted by the lender during the
term of the loan, the lender complies with Section 12-118 of this
subtitle;

(iii) Upon the borrower's default, if the loan
is secured by personal property, the lender complies with Section
12-115 of this subtitle concerning repossession and redemption of
the goods securing the loan;

(iv) If the loan is for the purchase of
consumer goods, the loan contract complies with Section 12-117 of
this subtitle; and

(v) The loan does not include a balloon
payment, unless payment in full is due on demand or in one year
or less.

(b)  (1) A lender may charge interest at any effective rate
of simple interest on the unpaid principal balance of a loan if:

(i) There is a written agreement signed by the
borrower which sets forth the stated rate of interest charged by
the lender;

(ii) The loan is secured by a first mortgage or
first deed of trust on any interest in residential real property;

(iii) There is no prepayment penalty in
connection with the loan;