1748

LAWS OF MARYLAND

Ch. 150

(4) A lender who makes a loan under this subsection
is subject to the licensing provisions of Title 11, Subtitle 3 of
the Financial Institutions Article.

(d)  A lender may charge interest at any rate not in excess
of that permitted by federal law if the loan is:

(1)  Secured by a mortgage or deed of trust;

(2)  Insured or guaranteed in full or in part by the
Federal Housing Administration, Veterans Administration, or any
other federal agency or instrumentality; and

(3)  Made in full compliance with applicable federal
law.

(e)  (1) A lender may charge interest at any rate if the
loan is:

(i) A loan made to a corporation; or

(ii) A commercial loan in excess of $5,000.

(2) Commercial loans to individuals secured by
residential real property shall comply with the provisions of §
12-407.1 of the Commercial Law Article.

(f)  A broker or dealer, who is registered under the
Securities Exchange Act of 1934, as amended, and under Title 11
of the Corporations and Associations Article of the Annotated
Code of Maryland, and who extends credit to a customer on pledged
securities, may charge the customer on his debit balance interest
at any rate if:

(1)  The debit balance is payable on demand; and

(2)  The debit balance is secured by securities as
defined in § ll-101(o) of the Corporations and Associations
Article.

12-404.

(a)  A lender may:

(1)  Make a loan in such an amount that the net
proceeds of the loan equal a predetermined sum; and

(2)  Take interest in advance on the full amount of
the loan for the period from the date the loan is made to the
date of maturity of the final installment.

(b)  [A lender may charge interest at any effective rate
of simple interest not to exceed 16 percent per annum on the
principal balance of a loan, except as provided in subsection (d)
of this section.