WILLIAM DONALD SCHAEFER, Governor                        S.B. 209

(4)     The loan instrument shall specify the circumstances under which the
rate may increase or decrease, any limitations on an increase or decrease, and the effects
of an increase or decrease;

(5)     A lender must allow the borrower the choice of implementing the
variable rate feature of the loan either by changes in the amount of periodic payments or
by extending or reducing the length of the term of the obligation;

(6)     Through a periodic billing statement or other written notice, the
borrower is notified of the basis and effect of a change in rate, including any change in the
required periodic payment amount, at least 15 days prior to the due date of the first
payment that reflects the changed rate; and

(7)     No new closing costs, processing fees or similar fees are imposed on the
borrower as a result of adjustments in rate.

Article - Financial Institutions

6-501.

(A)     Subject to the provisions of this subtitle, a credit union may make loans to its
members for the purposes and on the terms as the bylaws provide.

(B)     NOTWITHSTANDING §§ 6-506(C) AND 6-507 OF THIS SUBTITLE AND § 12-913.1
OF THE COMMERCIAL LAW ARTICLE, ON OR AFTER OCTOBER 1, 1994, A REVOLVING
CREDIT PLAN AND EXTENSIONS OF CREDIT UNDER A REVOLVING CREDIT PLAN
OFFERED AND EXTENDED BY A CREDIT UNION TO A MEMBER ARE MADE UNDER
AND ARE SUBJECT TO TITLE 12, SUBTITLE 9 OF THE COMMERCIAL LAW ARTICLE.

(C) NOTWITHSTANDING §§ 6-506(C) AND 6-507 OF THIS SUBTITLE AND §
12-1013.1 OF THE COMMERCIAL LAW ARTICLE, ON OR AFTER OCTOBER 1, 1994. A
CLOSED END LOAN MADE BY A CREDIT UNION TO A MEMBER IS MADE UNDER AND
IS SUBJECT TO TITLE 12, SUBTITLE 10 OF THE COMMERCIAL LAW ARTICLE.

(D) EXCEPT AS PROVIDED IN §§ 6-506(C) AND 6-507 OF THIS SUBTITLE AND
EXCEPT AS OTHERWISE PROVIDED UNDER THE EXPRESS TERMS OF THE
AGREEMENT, NOTE, OR OTHER EVIDENCE OF AN EXTENSION OF CREDIT OR LOAN,
THE PROVISIONS OF TITLE 12, SUBTITLE 1, 3, 4, 5, 6, 9, OR 10 OF THE COMMERCIAL LAW
ARTICLE DO NOT APPLY TO AN EXTENSION OF CREDIT OR LOAN MADE BY A CREDIT
UNION BEFORE OCTOBER 1, 1994.

6-506.

(a)     With the approval of the Bank Commissioner, a credit union may make loans
to members as provided in this section.

(b)     A loan under this section shall be:

(1)     Secured by a first or second mortgage on real property; and

(2)     Amortized over a period of 30 years or less.

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