1750                                          LAWS OF MARYLAND                                      Ch. 150

(5) If the loan is for the purchase of consumer
goods, the loan contract complies with Section 12-117 of this
title.

12-505.

(a)  In a closed end account, the finance charge may not
exceed [the greater of:

(1)  An amount computed using the following annual
simple interest rates of finance charge:

(i) 22 percent on that part of the outstanding
balance not exceeding $1,000; and

(ii) 18 percent on that part of the outstanding
balance exceeding $1,000; or

(2)  A minimum charge of $10 or, if the due date of
the last installment is eight months or less after the effective
date of the retail credit account agreement, $8.

(3)  Notwithstanding the provisions of paragraph (1)
of this subsection, in a closed end account made on or after July
1, 1982, [and before July 1, 1985,2 the finance charge may not
exceed] 24 percent per annum simple interest.

(b)  (1) In a closed end account, the finance charge may be
computed:

(i) On the actual unpaid principal outstanding
from time to time; or

(ii) In advance, at the time the purchase is
made, by adding to the original unpaid balance the amount of
finance charge that would be earned if the account were repaid
exactly according to its terms at the rate stated in subsection
(a) of this section.

(2) Nothing in this section shall be construed to
prohibit any particular method of computing the finance charge on
a closed end account so long as the amount of the finance charge
does not result in a rate of charge in excess of that permitted
by subsection (a) of this section.

(c)  Amounts due under a closed end account may be payable
in successive monthly, semimonthly, or weekly installments.

(d)  As part of the regular practice of a holder, he may
include fractional periods of 15 days or more as a whole month if
he also entirely excludes fractional periods of 14 days or less.

(e) (1) A buyer may prepay at any time, without penalty,
all or any part of the outstanding balance of a closed end
account.