An Act To Provide Parity in Lending by State-chartered Financial Institutions
Maine Legislature, Session 121, LD 0614
Committee: Insurance and Financial Services
Sponsors: MAYO, LafOUNTAIN, CLOUGH, DAVIS, DUPLESSIE, KOFFMAN, SIMPSON, SULLIV AN, TRAHAN
Amends: 9-A MRSA §2, 9-B MRSA §429, 9-B MRSA §439-A

Legislative Document 
No. 614 
S.P.223 
In Senate, February 11, 2003 
An Act To Provide Parity in Lending by State-chartered Financial 
Institutions 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MAYO of Sagadahoc. 
Cosponsored by Representati ve O'NEIL of Saco and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senator: LafOUNTAIN of York, Representatives: CLOUGH of Scarborough, DAVIS of 
Falmouth, DUPLESSIE of Westbrook, KOFFMAN of Bar Harbor, SIMPSON of Auburn, 
SULLIV AN of Biddeford, TRAHAN of Waldoboro. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 9-A MRSA §2-509. as enacted by PL 1973, c. 762, §L 
is amended to read: 
§2-509. Right to prepay 
Subject to the provisions on rebate upon prepayment, section 
2-510, the consumer may prepay in full the unpaid balance of a 
consumer credit transaction at any time without penalty, except 
for minimum charges as permitted by law. 
Notwithstanding any 
other 
provision of 
this Title, 
a 
reasonable 
charge 
may 
be 
assessed upon a consumer related to prepayment of a consumer loan 
secured by 
an interest in land if the charge is reasonably 
calculated to offset the cost of origination of the loan. 
Sec. 2. 9-B MRSA §429, sub-§§2 and 3, as repealed and replaced 
by PL 1983, c. 679, §2, are amended to read: 
2. 
Payment 
of 
interest or 
dividends. 
Each 
mortgagee 
holding funds of a mortgagor in an escrow account on behalf of 
itself or another mortgagee for the payment of taxes or insurance 
premiums with respect to mortgaged property located in this State 
shall 
pay 
the 
mortgagor, 
at 
least quarterly, 
dividends 
or 
interest on the account at a rate of not less than 3% per year L 
but when the mortgagee is a financial institution that offers 
savings deposit or share accounts to consumers, 
the mortgagee 
shall pay the mortgagor dividends or interest on the account at a 
rate of not less than 
1% 
per year, 
the institution is not 
reguired to pay more than 3% per year on the escrowed funds. 
The 
dividends or interest paid under this subsection may 
not be 
reduced by any charge for service or maintenance of the account. 
3. 
Computing and crediting interest. 
Under subsection 2, 
in the case of escrow accounts offered by mortgagees other than 
financial institutions offering savings deposit or share accounts 
to 
consumers, 
interest saa±± must 
be 
computed 
on the daily 
balances in the account from the date of receipt to the date of 
disbursement and sha±± ~ 
be credited to the account as of the 
last business day of each quarter of a calendar or fiscal year. 
If ~he such an account is closed or discontinued before the last 
business day of a quarter of a calendar or fiscal year, interest 
sha±± ~ 
be computed and credited as of the day the account is 
closed 
or 
discontinued. 
For 
purposes 
of 
~hi&--be€~ieB the 
foregoing calculations, the mortgagee may take into account debit 
balances 
resulting 
from 
advances 
and 
may 
elect 
to 
compute 
interest on the basis of the actual number of days in each 
quarter and year, or on the basis of a 30-day month and a 360-day 
year. 
At least once a year, the mortgagee, including financial 
institutions 
offering 
savings 
deposit 
or 
share 
accounts 
to 
Page l-LR0926 (1) 
consumers, 
shall give 
the mortgagor 
a 
statement 
showing 
the 
interest credited on the escrow account during the period whieh 
that the statement covers. 
Sec. 3. 9-B MRSA §439-A, sub-§2, ,A, as enacted by PL 1999, c. 
205, §1, is amended to read: 
A. 
The superintendent may grant a partial or full waiver of 
the voting requirement for 
loans or other extensions of 
credit 
iR-~--e-f--lG%--(}-t;.--t.&t.-a-l--ea~i,1;a± for good cause 
shown. 
In granting this waiver, the superintendent shall 
consider capital, management and resources of the financial 
institution or other relevant factors as determined by the 
superintendent. 
SUMMARY 
This bill is intended to update Maine's 
order to make Maine chartered institutions more 
nationally chartered institutions. 
lending laws in 
competitive with 
The 
bill 
gives 
Maine 
lenders 
the 
same 
out-of-state 
or 
national 
bank 
lenders 
to 
assess 
prepayment charges on adjustable-rate mortgages. 
abili ty 
as 
reasonable 
The bill allows state-chartered banks and credit unions to 
adjust interest rates on escrow accounts as they are permitted to 
do on savings or share accounts, while maintaining a fair rate 
for consumers. 
The bill expands 
the authority of the Superintendent of 
Financial Institutions within the Department of Professional and 
Financial 
Regulation 
to 
waive 
an 
aspect 
of 
the 
loans-to-one-borrower rules for well-capitalized institutions.