WILLIAM DONALD SCHAEFER, Governor                         Ch. 549

(2)     The lender must allow the borrower the choice of repaying his existing
loan balance at the originally agreed upon rate and obtaining any additional extension of
credit as a separate loan, notwithstanding any law which limits the lender's ability to make
more than 1 loan to the same borrower;

(3)     The lender must refund or credit to the borrower's account any
unearned interest and any returned insurance premiums upon the cancellation of
insurance sold in connection with the loan;

(4)     Except in the case of a demand loan, a loan may be refinanced only upon
the borrower's request;

(5)     The lender must allow the borrower the right to cancel the consolidated
loan agreement within 3 business days. The lender shall provide to the borrower
conspicuous notice of the provisions of this subsection; and

(6)     Nothing in this subsection shall prohibit the receipt of the loan proceeds
by the borrower at the time the consolidated loan agreement is made. The borrower must
return any loan proceeds received pursuant to the consolidated loan agreement if he
elects to cancel the consolidated loan agreement pursuant to subsection (5). The
borrower may retain the loan proceeds if he elects the separate loan option pursuant to
subsection (2).

12-117.

With respect to any loan made at a rate pursuant to § 12-103(a) and (c) or § 12-404
of the Commercial Law Article [or § 6-507 of the Financial Institutions Article], the
lender must comply with § 14-1302 of this article except that subsection (c) of § 14-1302
is not applicable.

12-118.

A lender may not enter into a loan agreement, providing for an initial interest rate
pursuant to § 12-103(a) and (c), § 12-306, or § 12-404 of this title [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.

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