WILLIAM DONALD SCHAEFER, Governor                           S.B. 329

(3) EXCEPT AS EXPRESSLY ALLOWED BY LAW, AN AGREEMENT
GOVERNING A REVOLVING CREDIT PLAN OR ANY INSTRUMENT WHICH EVIDENCES
OR SECURES AN EXTENSION OF CREDIT UNDER THE PLAN MAY NOT CONTAIN A
PROVISION BY WHICH THE BORROWER WAIVES ANY RIGHT ACCRUING TO THE
BORROWER UNDER THIS SUBTITLE.

(2) (4) (I) ANY CLAUSE OR PROVISION IN AN AGREEMENT
GOVERNING THE PLAN OR IN ANY INSTRUMENT WHICH EVIDENCES OR SECURES AN
EXTENSION OF CREDIT UNDER A PLAN THAT IS IN VIOLATION OF THIS SUBSECTION
SHALL BE UNENFORCEABLE.

(II)     SUBJECT TO SUBPARAGRAPH (III) OF THIS PARAGRAPH, THE
PENALTIES SET OUT UNDER §§ 12-917 AND 12-918 OF THIS SUBTITLE DO NOT APPLY
UNLESS THE CREDIT GRANTOR ATTEMPTS TO ENFORCE A PROVISION PROHIBITED
UNDER THIS SUBSECTION.

(III)    THE PENALTIES SET OUT UNDER §§ 12-917 AND 12-918 OF THIS
SUBTITLE DO NOT APPLY TO THE ENFORCEMENT BY A CREDIT GRANTOR OF A
PROVISION OTHERWISE PROHIBITED UNDER THIS SUBSECTION WHERE THE
ENFORCEMENT WAS INITIATED BY THE CREDIT GRANTOR PRIOR TO OCTOBER 1,

1993.

(D) (C) UNLESS A BORROWER HAS NOTICE OF AN ASSIGNMENT OF THE
ACCOUNT ESTABLISHED UNDER THE PLAN, ANY PAYMENTS MADE BY THE
BORROWER TO THE LAST KNOWN HOLDER OF THE ACCOUNT SHALL DISCHARGE
THE BORROWER'S OBLIGATION TO THE EXTENT OF THE PAYMENTS.

(E) (D) UPON RECEIPT OF A CASH PAYMENT FROM A BORROWER, A CREDIT
GRANTOR SHALL GIVE THE BORROWER A WRITTEN RECEIPT FOR THE PAYMENT.

12-923.1.

(A)     ANY STATEMENT OR CHARACTERIZATION THAT INDICATES THE
BORROWER INTENDS TO USE A PLAN TO OBTAIN LOANS OR OTHER EXTENSIONS OF
CREDIT SOLELY TO ACQUIRE AN INTEREST IN OR TO CARRY ON A BUSINESS OR
COMMERCIAL ENTERPRISE MAY BE RELIED UPON BY A CREDIT GRANTOR IN
ESTABLISHING A PLAN, UNLESS THE CREDIT GRANTOR KNOWS OR SHOULD KNOW
THAT THE STATEMENT OR CHARACTERIZATION IS FALSE OR MISLEADING.

(B)      AS A CONDITION TO THE ESTABLISHMENT OF A PLAN, A CREDIT
GRANTOR MAY NOT REQUIRE A BORROWER TO MAKE ANY FALSE OR MISLEADING
STATEMENT OR CHARACTERIZATION THAT LOANS OR OTHER EXTENSIONS OF
CREDIT TO BE OBTAINED UNDER A PLAN ARE COMMERCIAL LOANS OR FOR A
COMMERCIAL PURPOSE IF THE CREDIT GRANTOR KNOWS OR SHOULD KNOW THEY
ARE NOT COMMERCIAL LOANS OR FOR A COMMERCIAL PURPOSE.

(C)     THE BORROWER HAS THE BURDEN OF PROVING THAT A CREDIT
GRANTOR KNEW OR SHOULD HAVE KNOWN THAT A STATEMENT OR
CHARACTERIZATION DESCRIBED IN SUBSECTION (A) OR (B) OF THIS SECTION WAS

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