An Act To Facilitate Small Loans in Maine
Maine Legislature, Session 128, LD 1164
Committee: Insurance and Financial Services
Sponsors: CUSHING, WHITTEMORE, WALLACE
Amends: 9-A MRSA §2

Legislative Document
No. 1164
S.P. 385
In Senate, March 23, 2017
An Act To Facilitate Small Loans in Maine
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator CUSHING of Penobscot.
Cosponsored by Senator: WHITTEMORE of Somerset, Representative: WALLACE of Dexter.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  9-A MRSA §2-311 is enacted to read: 
§2-311.  Small loan requirements 
A lender providing a small loan must comply with the following requirements. For 
purposes of this section, "small loan" means a loan in an amount of $2,000 or less. 
1.  The term for a small loan must be at least 50 days for a loan amount of $1,000 or 
less and at least 6 months for a loan amount greater than $1,000 and less than or equal to 
$2,000. 
2.  The interval between payments for a small loan may be agreed upon by the 
parties, except that intervals between payments must be substantially equal with 
reasonable variance for the first payment and nonbusiness days. 
3.  Installment payments for a small loan must be substantially equal and fully 
amortizing over the contracted term.  For closed-end credit, the contracted term may not 
exceed 24 months.  For a line of credit, the minimum payments due must be substantially 
equal and fully amortizing based on a period not to exceed 12 months.  For any new 
draws under the line of credit, a lender shall recalculate installment payments for a period 
not to exceed 12 months. 
4.  The amount of a borrower's payments coming due within a calendar month with 
respect to a small loan may not exceed 10% of the borrower's gross monthly income as 
evidenced by the borrower's pay stub or other equivalent proof of income. 
5.  A borrower may cancel a small loan and avoid the payment of finance charges by 
returning the amount financed to the lender providing the small loan by the end of the 
next business day after the origination of the small loan. 
6.  A lender providing a small loan may not take personal or real property as 
collateral from the borrower as security for payment of the small loan. 
7.  A lender providing a small loan may not charge any fees related to insurance in 
connection with the origination of the small loan. 
Sec. 2.  9-A MRSA §2-401, sub-§2, as amended by PL 1997, c. 727, Pt. B, §10, 
is further amended to read: 
2.    With respect to a consumer loan, other than a loan pursuant to open-end credit 
unless otherwise provided in this Part, a lender may contract for and receive a finance 
charge calculated according to the actuarial method, not exceeding the equivalent of the 
following: 
A.  The total of: 
(i)  30% per year on that part of the unpaid balances of the amount financed that 
is $2,000 or less; 
(ii)  24% per year on that part of the unpaid balances of the amount financed that 
is more than $2,000 but does not exceed $4,000; and 
(iii)  18% per year on that part of the unpaid balances of the amount financed that 
is more than $4,000. 
Notwithstanding paragraph A, with respect to a consumer loan in which the amount 
financed exceeds $8,000, a lender may not contract for and receive a finance charge 
calculated according to the actuarial method in excess of 18% per year on the entire 
amount of the loan. 
Sec. 3.  9-A MRSA §2-402, sub-§1, as amended by PL 1987, c. 129, §44, is 
further amended to read: 
1.    With respect to loans made on open-end credit, a creditor may contract for and 
receive a finance charge not in excess of that permitted in this section unless otherwise 
provided in this Part. 
Sec. 4.  9-A MRSA §2-403 is enacted to read: 
§2-403.  Finance charge for small loans 
A supervised lender offering a small loan in compliance with the requirements under 
section 2-311 may charge the following fees in addition to the interest rate allowed under 
sections 2-401 and 2-402: 
1.  An origination fee not to exceed 10% of the principal amount. The origination fee 
may be considered a prepaid finance charge and is not subject to refund upon prepayment 
in full; and 
2.  A monthly maintenance fee not to exceed 15% of the average principal loan 
amount outstanding for that month.  The monthly maintenance fee is earned and may be 
charged for each month the loan is outstanding. 
SUMMARY 
This bill amends the Maine Consumer Credit Code.  It enacts requirements for loans 
of $2,000 or less and it authorizes consumer loan lenders and open-end credit creditors to 
charge origination fees and monthly maintenance fees.