2780                                          LAWS OF MARYLAND                                      Ch. 732

Annotated Code of Maryland

(1983 Replacement Volume and 1985 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Commercial Law

12-407.

(a)  (1) In this section the following words have the
meanings indicated.

(2) "ACTUARIAL METHOD" MEANS THE METHOD OF ALLOCATING
PAYMENTS MADE ON A LOAN BETWEEN THE OUTSTANDING PRINCIPAL BALANCE
OF THE LOAN AND INTEREST, BY WHICH A PAYMENT IS APPLIED FIRST TO
THE ACCUMULATED INTEREST, AND ANY REMAINDER IS SUBTRACTED FROM
THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN.

[(2)] (3) "Cost of the loan" means the total
amount of:

(i) As nearly as the same can be determined,
the charges payable by the borrower for the loan under §§ 12-405
(a) and (b) and 12-410; and

(ii) The interest which will be charged if the
loan is carried to maturity.

[(3)] (4) "Commissioner" has the meaning stated
in § 12-301(b) of the Financial Institutions Article.

(5) "PRECOMPUTED INTEREST CHARGE" MEANS INTEREST AS
COMPUTED BY AN ADD ON, DISCOUNT, OR OTHER SIMILAR METHOD.

(b)  At the time a loan is made, the lender shall deliver to
the borrower a statement in a form required by the Commissioner
that complies with § 12-106(b) of this title.

(c)  (1) Except as provided in paragraph (2) of this
subsection, at the time a lender receives a payment on account of
a loan, the lender shall give to the borrower a plain and
complete receipt for the payment.

(2) If the payment is made by personal check, money
order, cashier's check, or treasurer's check, the lender need
give a receipt to the borrower only on the request of the
borrower.

(d)  (1) A lender shall permit a borrower to prepay a loan
in full or in part at any time, without penalty.

(2) If a borrower prepays a loan in full, he shall
receive a refund credit for the interest taken in advance. The