PARRIS N. GLENDENING, Governor                             Ch. 588

LENDER'S OWN USE MONEYS IN EXCESS OF $300 RIGHTFULLY BELONGING TO A
BORROWER IS GUILTY OF A FELONY AND ON CONVICTION IS SUBJECT TO A FINE
NOT TO EXCEED $100,000 OR IMPRISONMENT NOT EXCEEDING 15 YEARS OR BOTH.

Article - Commercial Law

12-903.

(a) (1) A credit grantor may charge and collect interest or finance charges
under the plan on the outstanding unpaid indebtedness in the borrower's account under
the plan at any daily, weekly, monthly, annual, or other periodic percentage rate as the
agreement governing the plan provides, if the effective rate of simple interest does not
exceed 24 percent per year. The rate of interest chargeable on a plan must be expressed
in the agreement as a simple interest rate or rates.

(2)     The repayment terms for a plan extended to a consumer borrower may
not include a provision under which the consumer borrower may be required to pay a
balloon payment at maturity. However, the adjustment of payment amounts, due to
fluctuations in unpaid balance or rate of interest, may not be deemed to result in a
balloon payment.

(3)     IF THE. PLAN IS SECURED BY A LIEN ON RESIDENTIAL REAL
PROPERTY, THE CREDIT GRANTOR MAY, IN ADDITION TO THE PERIODIC
PERCENTAGE RATE CHARGE AUTHORIZED UNDER SUBSECTION (A)(1) OF THIS
SECTION, CHARGE AND COLLECT AT THE TIME THE PLAN IS ENTERED INTO BY THE
BORROWER POINTS, LOAN ORIGINATION FEES. LOAN DISCOUNT FEES, AND SIMILAR
FEES, PROVIDED THAT:

(I) ALL SUCH FEES MAY NOT EXCEED 2 PERCENT OF THE
MAXIMUM AMOUNT OF CREDIT MADE AVAILABLE TO THE BORROWER UNDER THE
PLAN;

(II) THE DOCUMENTS EVIDENCING THE PLAN SPECIFICALLY
ENUMERATE ANY SUCH FEES;

(II) (III) THE BORROWER AGREES IN WRITING TO PAY THOSE
FEES; AND

(III) (IV) THE FEES ARE DISCLOSED TO THE BORROWER IN
ACCORDANCE WITH THE FEDERAL TRUTH IN LENDING ACT.

12-905.

(e) For purposes of this section, the additional charges listed in subsections (a),
(b), [(f), and (g)] AND (F) of this section are not interest or finance charges with respect
to a plan.

[(g) A credit grantor of an open end credit plan that is secured by real property
may charge an origination fee not to exceed 2% of the initial advance made under the
plan.]

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