HARRY HUGHES, Governor                                     1747

(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 1 year or
less.

(2)  The rates permitted by this subsection may be
charged only 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 not secured by a first
mortgage or first deed of trust on real property;

(iii) The borrower is required to repay the
loan in periodic installments, which may be regular, irregular,
equal or unequal installments;

(iv) The loan is not secured by a confession of
judgment or power of attorney to the lender or to a third person
to confess judgment or appear for the borrower in a judicial
proceeding;

(v) The loan is not secured by an instrument in
which blanks are left to be filled after execution;

(vi) The loan is not secured by a note, promise
to pay, or security instrument which does not state:

(A) The principal amount of the loan;

(B)  A schedule of payments or a
description of the schedule; and

(C)  The agreed amount or rate of
interest, charges, and fees to be charged;

(vii) The loan is not secured by real property;

(viii) The loan is not secured by personal
property for any loan under $700 in value or amount; and

(ix) The loan is not fully secured by
investment securities or savings accounts.

(3)  If interest on a loan made under this subsection
is precomputed, and if the effective rate of simple interest
required to be disclosed under § 12-106 of this subtitle is
exceeded by reason of a prepayment of the loan, the lender shall
refund the excess to the borrower or credit it to any unpaid
principal balance owed by him.