3620

VETOES

(vi) The lender did not issue before the
effective date of this section, a written commitment agreeing to
make the loan at a rate of interest of 10 percent or less.

(2)  For purposes of paragraph (l)(vi) of this
subsection:

(i) "Written commitment" includes any written
commitment, written offer to lend, or other written statement
issued by a lender which reasonably can be construed to be an
offer to make the loan; and

(ii) A written commitment issued before the
effective date of this section, to make a loan at an unspecified
rate of interest is a commitment to make the loan at a rate of
interest of 10 percent or less.

(3)  For the purpose of paragraph (l)(v) of this
subsection, a refinancing by which the borrower elects to
increase the balance due on an existing loan is not a renewal of
the loan.

12-118.

A lender may not enter into a loan agreement, providing for
an initial interest rate pursuant to Sections 12-103(a), (B), and
OR (c), 12-306, or 12-404 of the Commercial Law Article or
Section 6-507 of the Financial Institutions Article, which
contains a provision that permits the lender to increase or
decrease the applicable rate of interest or finance charges from
time to time during the term of the obligation, unless:

(1)  The loan is secured by an interest in real
property;

(2)  Any such provision limits adjustments in the rate
on an obligation as follows:

(i) The increase and decrease in the rate is
determined by an objective index which is not directly controlled
by the lender and which is agreed upon by the parties to the
agreement.

(ii) The rate may not be adjusted more
frequently than once in a 6 month period.

1.  The amount of increase in any 6 month
period may not be more than the equivalent of 1 percentage point
above the rate in effect prior to the rate change.

2.  Notwithstanding subparagraph (i), if
the rate of change in any index so allows, the rate may be
increased to not more than the originally contracted for rate if
authorized by the loan agreement. The agreed upon additional
increases must comply with subparagraph (i).