reglab/statecodes huggingface dataset:
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-107 - Computing Interest Rate if Charge Assessed at Inception of Loan

If a charge or fee considered interest under this subtitle is charged at or before the inception of a loan contract, the effective rate of simple interest permitted to be charged by §§ 12-102 and 12-103 of this subtitle, and required to be disclosed by § 12-106 of this subtitle shall be determined in the same manner as if the fee or charge had not been charged, except that the principal of the loan used in determining the rate of interest is the face amount of the loan less the fee or charge.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-108 - Points Prohibited; Exceptions; Charges Which Lenders May Impose

(a)    Except for a loan described in § 12–103(d) or (e) of this subtitle, a lender may not charge a borrower or any other person any point or fraction of a point.
(b)    Notwithstanding the provisions of subsection (a) of this section, a lender may charge points on a mortgage loan which is not insured or guaranteed by an agency or instrumentality of the United States government if:
(1)    The loan is eligible for purchase by an agency or instrumentality of the United States government, or a subsidiary thereof, pursuant to the Emergency Home Purchase Assistance Act of 1974 (PL93–449) or any amendment to it, and is tendered in good faith for purchase pursuant to a commitment obtained by the lender from such an agency, instrumentality, or subsidiary; and
(2)    The federal law, rules, or regulations under which the agency, instrumentality, or subsidiary is authorized to purchase the loan allows the payment of points, and the points charged and the interest rate on the loan are not in excess of those allowed under the federal program.
(c)    Notwithstanding the provisions of subsection (a) of this section, a lender may impose and collect, as a condition of making a loan, all fees, discounts, points, or other charges that lenders are permitted or required to impose, collect, or pay pursuant to a federal or Maryland law providing for a program of mortgage purchases or loans originated pursuant to a State or local governmental program of direct lending or mortgage purchase, or by any federal agency or instrumentality or subsidiary thereof, including, but not limited to, Government National Mortgage Association, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Reserve Bank, Federal Home Loan Bank, and the Farmers Home Administration, provided that all of the following conditions are met:
(1)    The loan is eligible for purchase by, and is tendered in good faith, for purchase, pursuant to a commitment or offer to purchase by the federal, State, or local governmental agency, instrumentality, or subsidiary;
(2)    The fees, discounts, points, or other charges imposed, and the interest rate on the loan, do not exceed those allowed by the applicable federal or Maryland law providing for the mortgage purchase program; and
(3)    Not more than one point is charged to the borrower, unless the federal law specifies a higher limit on points which may be charged to the borrower.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-109.2 - Management of Escrow Accounts; Lender's Bankruptcy; Fees and Charges

(a)    (1)    In this section the following terms have the meanings indicated.
(2)    “Escrow account” has the meaning stated in § 12-109 of this subtitle.
(3)    “Lender” includes a lender and assignee of a lender.
(4)    “Mortgage” includes a mortgage and a deed of trust.
(b)    (1)    Funds in any escrow account shall be kept separate from and may not be commingled with the funds of the lender.
(2)    A lender may place escrow funds received in connection with more than one mortgage into a single escrow account.
(3)    In the event of the bankruptcy of the lender, any escrow funds placed in any escrow account under this section may not be considered to be part of the bankrupt estate of the lender.
(c)    A lender may not impose a collection fee or service charge on the maintenance of an escrow account on a first mortgage.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-112 - Usury Not Available Against Bona Fide Assignee

(a)    This section does not apply to a loan subject to § 12–114.1 of this subtitle.
(b)    A claim or plea of usury is not available against a legal or equitable assignee, endorsee, or transferee of any bond, draft, mortgage, deed of trust, security agreement, promissory note, or other instrument or evidence of indebtedness, if he receives it for a bona fide and legal consideration without notice of any usury in its creation or subsequent assignment.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-113 - Discrimination Prohibited

(a)    Except as provided in subsection (b) of this section, a lender may not refuse to lend money to any person solely because of:
(1)    Geographic area or neighborhood; or
(2)    Race, creed, color, age, sex, marital status, handicap, or national origin.
(b)    A lender may refuse to make a loan:
(1)    On property outside a geographic area of the State in which the lender normally does business;
(2)    To be used in a type of business or activity other than a type in connection with which the lender normally makes loans; or
(3)    Because of a greater than normal risk, including one due to:
(i)    The presence of an airport;
(ii)    An unusual drainage condition; or
(iii)    Any other situation which causes a greater than normal risk of loss in a particular area.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-114 - Penalties

(a)    This section does not apply to a loan subject to § 12–114.1 of this subtitle.
(b)    (1)    Any person who violates the usury provisions of this subtitle shall forfeit to the borrower the greater of:
(i)    Three times the amount of interest and charges collected in excess of the interest and charges authorized by this subtitle; or
(ii)    The sum of $500.
(2)    A claim or plea of usury is not valid if, within 30 days from the date the loan contract was executed, the lender:
(i)    Notifies the borrower and any other party to the loan contract that the loan was usurious; and
(ii)    Agrees to modify it by substituting for the usurious rate of interest a legal rate of interest not exceeding the stated rate of interest.
(c)    Any person who violates the disclosure provisions of § 12–106(b) and (c) of this subtitle is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 1 year or both.
(d)    Even if a loan document is executed outside of the State, this section is applicable if the loan is made to a resident of Maryland and is secured by property located within the State.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-114.1 - Covered Loan Prohibitions

(a)    (1)    In this section the following words have the meanings indicated.
(2)    (i)    “Covered loan” means a loan subject to § 12–103(a)(3) or (c) of this subtitle, made for personal, family, or household purposes, regardless of whether the loan is or purports to be made under this subtitle.
(ii)    “Covered loan” does not include:
1.    A loan or an advance of money or credit subject to Subtitle 3 of this title, unless a written election is made under § 12–101.1 of this subtitle;
2.    A plan or loan for which a written election has been made under Subtitle 3, Subtitle 4, Subtitle 9, or Subtitle 10 of this title; or
3.    An installment sale agreement as defined in § 12–601 of this title.
(3)    “Unlicensed person” means a person who is not:
(i)    Licensed in the State to make a covered loan; and
(ii)    Exempt from licensing in the State.
(b)    This section applies to a covered loan made to any person.
(c)    (1)    An unlicensed person may not make a covered loan.
(2)    A person may not make a covered loan if the person directly or indirectly contracts for, charges, or receives a rate of interest, charge, discount, or other consideration that is greater than the amount authorized under State law.
(3)    A person may not make a covered loan that violates the federal Military Lending Act.
(d)    (1)    A covered loan made by an unlicensed person is void and unenforceable.
(2)    (i)    Except as provided in subparagraph (ii) of this paragraph, a covered loan is void and unenforceable if a person contracts for a covered loan that has a rate of interest, charge, discount, or other consideration greater than the amount authorized under State law.
(ii)    A covered loan is not void and unenforceable if:
1.    A clerical error or mistake resulted in the rate of interest, charge, discount, or other consideration being greater than the amount authorized under State law; and
2.    A person corrects the error or mistake before the first payment is due under the loan.
(3)    A covered loan that violates the federal Military Lending Act is void and unenforceable.
(4)    With respect to a loan that is void and unenforceable under this section, a person may not:
(i)    Collect or attempt to collect, directly or indirectly, any amount from the borrower;
(ii)    Enforce or attempt to enforce the contract against any property securing the loan; or
(iii)    Sell, assign, or otherwise transfer the loan to another person.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-116 - Refinancing of Loan at Higher Rate

Any loan made before July 1, 1982, which is refinanced at a higher rate pursuant to § 12–103(a) and (c) of this subtitle or § 12–306 or § 12–404 of this title must comply with the following requirements:
(1)    The lender must give the following disclosures in writing to the borrower prior to the execution by the borrower of the new loan agreement:
If you do agree to consolidate your existing loan, you will be paying an annual percentage rate of . . . . .% on the existing net balance of $. . . ., instead of the rate of . . . . . .% which you are now paying.
Schedule of Monthly Payments
Separate loan agreements              Consolidated loan agreement
$ . . . . per month for                  $ . . . . per month for
the next . . . .months                  the next . . . .months
Then
$ . . . . per month for
. . . . months after that
Total of Payments
Separate loan agreements              Consolidated loan agreement
$ . . . . total of payments                  $ . . . . total of payments
for your existing loan                  for your consolidated
. . . . for your new loan                 loan
total of payments
(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) of this section. The borrower may retain the loan proceeds if he elects the separate loan option pursuant to subsection (2) of this section.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-117 - Compliance With 14-1302

With respect to any loan made at a rate pursuant to § 12–103(a) and (c) of this subtitle or § 12–404 of this title, the lender must comply with § 14–1302 of this article except that subsection (c) of § 14–1302 is not applicable.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-118 - Change in Rate of Interest or Finance Charge During Term of Obligation

A lender may not enter into a loan agreement, providing for an initial interest rate pursuant to § 12–103(a) and (c) of this subtitle or § 12–306 or § 12–404 of this title, 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.
1.    The amount of increase in any 6 month period may not be more than the equivalent of 1 percentage point above the rate in effect prior to the rate change.
2.    Notwithstanding subparagraph (i) of this paragraph, if the rate of change in any index so allows, the rate may be increased to not more than the originally contracted for rate if authorized by the loan agreement. The agreed upon additional increases must comply with subparagraph (i).
3.    Notwithstanding subparagraph (i) of this paragraph, the lender may decrease the rate at any time and by any amount;
(3)    Interest rate decreases warranted by decreases in the agreed upon index shall be mandatory except to the extent that past increases in the index have not been implemented by the lender, either at his option or because the lender was subject to the rate change limitation of paragraph (2) of this section;
(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.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-119 - Real Property Closing Costs

(a)    This section applies to any application for a loan, other than a commercial loan, to be secured by a first mortgage or first deed of trust on a borrower's primary residence.
(b)    Any lender that imposes fees on borrowers for settlement services, or document review services, performed by a lender-designated attorney, or who conditions settlement on the employment of a particular attorney or title insurance company under § 12-120(c) of this subtitle, shall provide a prospective borrower with a written notice stating:
(1)    The lender’s requirements concerning selection of an attorney, title insurance company, or other person to perform settlement services relating to the purchase of the real property;
(2)    The borrower’s ability to choose an attorney or title insurance company under § 12-120(c) of this subtitle; and
(3)    A good faith estimate of the fee or fees to be charged to the borrower.
(c)    If notice is required by this section:
(1)    The notice shall be provided at the time of or within 3 days after the application for a loan, or earlier upon request; and
(2)    A copy of the notice, signed by the applicant, shall accompany any executed application for a loan.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-120 - When Borrower Required to Pay for Services of Lender's Attorney

(a)    This section applies to any loan, other than a commercial loan, to be secured by a mortgage or deed of trust on a borrower’s primary residence.
(b)    A lender may require the borrower to pay for services rendered by the lender’s attorney in connection with a loan described in subsection (a) of this section only if:
(1)    The attorney’s fee is limited to legal services attributable to processing and closing the loan and not to unrelated services performed by the attorney for the lender;
(2)    The amount of the attorney’s fee, if in excess of $100, is supported by a statement, provided to the borrower at or prior to settlement, that:
(i)    Describes the services performed;
(ii)    Sets forth the time spent by the attorney and the hourly rate or other basis for determining the fee;
(iii)    States that the legal services are being performed on behalf of the lender and not on behalf of the borrower; and
(iv)    States that the services are being paid for by the borrower;
(3)    The amount of the attorney’s fee is reasonable on the basis of the legal services performed; and
(4)    The attorney’s fee is separately itemized on the loan settlement sheet and identified as a fee to the lender’s attorney.
(c)    (1)    A lender may not require as a condition of settlement that a borrower employ a particular attorney or title insurance company to perform a title search, examination of title, or closing if:
(i)    The borrower notifies the lender, within 7 days after application for the loan, of the name and business address of the borrower’s choice of attorney or title insurance company to perform the title search, examination of title, or closing; and
(ii)    The lender does not reject the borrower’s choice of attorney or title insurance company for good cause within 7 days after the receipt of the notice under item (i) of this paragraph.
(2)    Subject to the requirements of subsection (b) of this section, this subsection may not be construed to prohibit a lender from requiring a borrower to pay for:
(i)    Preparation of loan closing documents;
(ii)    Title insurance;
(iii)    Review of documents prepared by the borrower’s attorney; or
(iv)    Attendance at settlement by the lender’s attorney.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-121 - Lender's Inspection Fees

(a)    In this section, the term “lender’s inspection fee” means a fee imposed by a lender to pay for a visual inspection of real property.
(b)    Except as provided in subsection (c) of this section, a lender may not impose a lender’s inspection fee in connection with a loan secured by residential real property.
(c)    A lender’s inspection fee may be charged if the inspection is needed to ascertain completion of:
(1)    Construction of a new home; or
(2)    Repairs, alterations, or other work required by the lender.
(d)    This section does not apply to an appraisal of the value of real property by a lender or to fees imposed in connection with an appraisal.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-122 - Violations

Any lender who knowingly and willfully violates any provision of § 12-103, § 12-109.2, § 12-119, § 12-120, or § 12-121 of this subtitle is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500, or imprisonment not exceeding 6 months, or both.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-123 - Insurance Binders

(a)    In this section, “binder” means a binder or other temporary contract of insurance as provided under § 12-106 of the Insurance Article.
(b)    A lender shall comply with this section if the lender:
(1)    Makes any loan secured by a first mortgage or a first deed of trust on any interest in owner-occupied residential real property; and
(2)    As a condition of making the loan, requires the borrower to purchase property insurance or credit loss insurance.
(c)    A lender who makes a loan subject to this section shall accept as evidence of insurance a written binder issued by any authorized insurer or its insurance producer if the binder includes or is accompanied by:
(1)    The name and address of the insured borrower;
(2)    The name and address of the lender;
(3)    A description of the insured residential real property;
(4)    A provision that the binder may not be canceled within the term of the binder unless the lender and the insured borrower receive written notice of the cancellation at least 10 days prior to the cancellation;
(5)    Except in the case of the renewal of a policy subsequent to the closing of the loan, a paid receipt for the full amount of the applicable premium; and
(6)    The amount of coverage.
(d)    This section does not prohibit a lender from refusing to honor a binder in cases where:
(1)    The lender receives notice of the cancellation of the binder by the insurer; or
(2)    At the expiration of 30 days of the date the binder was given, the insurer has failed to issue the policy of insurance.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-124 - Property Insurance Coverage

(a)    (1)    (i)    In this section the following words have the meanings indicated.
(ii)    “Flood insurance coverage” means flood insurance against losses caused by flooding that are covered under a policy issued by:
1.    The federal government; or
2.    An insurer.
(iii)    “Improvements” means buildings or structures erected upon or affixed to real property that enhance the value of the real property.
(iv)    “Property insurance coverage” means property insurance against losses caused by perils that commonly are covered in insurance policies described with terms similar to “standard fire” or “standard fire with extended coverage”.
(v)    1.    “Replacement cost” means the amount needed to repair damage to or rebuild improvements on real property to restore the improvements to their pre-loss condition.
2.    “Replacement cost” does not include the value of land.
(2)    A lender may not require a borrower, as a condition to receiving or maintaining a loan secured by a first mortgage or first deed of trust, to provide or purchase property insurance coverage against risks to any improvements on any real property in an amount exceeding the replacement cost of the improvements on the real property.
(3)    A lender may not require a borrower, as a condition to receiving or maintaining a loan secured by a first mortgage or first deed of trust, to provide or purchase flood insurance coverage in an amount exceeding the replacement cost of the improvements on the real property.
(4)    In determining the replacement cost of the improvements on any real property, the lender may:
(i)    Accept the value placed on the improvements by the insurer; or
(ii)    Use the value placed on the improvements by the lender’s appraisal of the improvements.
(5)    A lender may not require that the insurance be purchased through a particular insurance producer or insurance company.
(b)    (1)    A violation of this section shall entitle the borrower to:
(i)    Seek an injunction to prohibit the lender who has engaged or is engaging in the violation from continuing or engaging in the violation;
(ii)    Reasonable attorney’s fees; and
(iii)    Damages directly resulting from the violation.
(2)    A violation of this section does not affect the validity of the first mortgage or first deed of trust securing the loan.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-124.1 - Homeowner Equity Protection

(a)    (1)    In this section the following words have the meanings indicated.
(2)    “Covered loan” means a mortgage loan made under this subtitle that meets the criteria for a loan subject to the federal Home Ownership Equity Protection Act set forth in 15 U.S.C. § 1602(bb), as modified from time to time by Regulation Z, 12 C.F.R. Part 1026, except that the comparison percentages for the mortgage loan shall be one percentage point less than those specified in 15 U.S.C. § 1602(bb), as modified from time to time by Regulation Z, 12 C.F.R. Part 1026.
(3)    “Credit health insurance” has the meaning stated in § 13–101 of the Insurance Article.
(4)    “Credit involuntary unemployment benefit insurance” has the meaning stated in § 13–101 of the Insurance Article.
(5)    (i)    “Credit life insurance” means insurance on the life of a borrower that provides indemnity for repayment of a specific loan or credit transaction on the death of the borrower.
(ii)    “Credit life insurance” does not include life insurance payable to a beneficiary designated by the borrower other than the obligee of a specific loan or credit transaction.
(6)    “Mortgage loan” has the meaning stated in § 11–501 of the Financial Institutions Article.
(7)    “Premium” has the meaning stated in § 1–101 of the Insurance Article.
(8)    “Single premium coverage” means insurance for which the total premium is payable in one lump sum at or before the time coverage commences.
(b)    (1)    Except as provided in this subsection, a lender making a covered loan may not finance as a part of the covered loan transaction single premium coverage for:
(i)    Credit health insurance;
(ii)    Credit involuntary unemployment benefit insurance; or
(iii)    Credit life insurance.
(2)    Nothing in this subsection shall prohibit the financing of any insurance coverage in connection with a mobile home or its premises, as those terms are defined in § 8A–101 of the Real Property Article.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-126 - Prepayment of Outstanding Unpaid Indebtedness

(a)    This section applies only to a loan that:
(1)    Is secured by a mortgage or deed of trust on the borrower’s primary residence; and
(2)    Is not a commercial loan.
(b)    Except to the extent expressly provided otherwise in the loan contract, a borrower may prepay all or part of outstanding unpaid indebtedness under a loan at any time.
(c)    In the event of prepayment of the entire loan, the lender shall refund or credit to the borrower the unearned portion of the precomputed interest charge. This refund or credit shall be in an amount not less than the amount which would be refunded or credited if the unearned precomputed interest charge were calculated in accordance with the actuarial method, except that the borrower may not be entitled to a refund or credit of less than $5. The unearned portion of the precomputed interest charge is, at the option of the lender, either:
(1)    That portion of the precomputed interest charge which is allocable to all originally scheduled or, if deferred, all deferred payment periods, or portions of payment periods, ending subsequent to the date of prepayment. The unearned precomputed interest charge is the total of that which would have been earned for each period, or portion of a period, had the loan not been prepaid, by applying to the unpaid balances of principal, according to the actuarial method, an annual percentage rate based on the precomputed interest charges, assuming that all payments were made as scheduled, or as deferred, if deferred. The lender, at its option, may round this annual percentage rate to the nearest 1/4 of 1 percent; or
(2)    The total precomputed interest charge less the earned precomputed interest charge. The earned precomputed interest charge shall be determined by applying an annual percentage rate based on the total precomputed interest charge, under the actuarial method, to the unpaid balances for the actual time those balances were unpaid up to the date of prepayment.
(d)    As used in subsection (c) of this section, the following terms have the meanings indicated.
(1)    “Actuarial method” means the method of allocating payments made on a loan between the outstanding principal balance of the loan and interest, by which a payment is applied first to the accumulated interest, and any remainder is subtracted from the outstanding principal balance of the loan.
(2)    “Payment period” means the time period within which scheduled payments on a loan are due as provided in the agreement, note, or other evidence of the loan.
(3)    “Precomputed interest charge” means interest as computed by an add on, discount, or other similar method.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 1 - Interest and Usury › Section 12-127 - Lender to Consider Homeowner's Ability to Repay Loan

(a)    (1)    In this section the following words have the meanings indicated.
(2)    “Fully indexed rate” means the index rate, as defined in the mortgage loan documents, prevailing at the time the mortgage loan is approved by the lender, plus the margin that will apply after the expiration of an introductory interest rate.
(3)    (i)    “Mortgage loan” has the meaning stated in § 11–501 of the Financial Institutions Article.
(ii)    “Mortgage loan” does not include a reverse mortgage loan.
(b)    A lender may not make a mortgage loan without giving due regard to the borrower’s ability to repay the mortgage loan in accordance with its terms, including the fully indexed rate of the mortgage loan, if applicable, and property taxes and homeowner’s insurance whether or not an escrow account is established for the collection and payment of these expenses.
(c)    (1)    Due regard to a borrower’s ability to repay a mortgage loan must include:
(i)    Consideration of the borrower’s debt to income ratio, including existing debts and other obligations; and
(ii)    Verification of the borrower’s gross monthly income and assets by review of third–party written documentation reasonably believed by the lender to be accurate and complete.
(2)    Acceptable third–party written documentation includes:
(i)    The borrower’s Internal Revenue Service form W–2;
(ii)    A copy of the borrower’s income tax return;
(iii)    Payroll receipts;
(iv)    The records of a financial institution; or
(v)    Other third–party documents that provide reasonably reliable evidence of the borrower’s income or assets.
(3)    This subsection does not apply to a mortgage loan:
(i)    Approved for government guaranty by the Federal Housing Administration, the Veterans Administration, the United States Department of Agriculture, the Maryland Department of Housing and Community Development, or the Community Development Administration; or
(ii)    That refinances an existing mortgage loan if the refinance mortgage loan is:
1.    Offered under the federal Homeowner Affordability and Stability Plan; and
2.    Made available by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-301 - Definitions

(a)    In this subtitle the following words have the meanings indicated.
(b)    “Commissioner” means the Commissioner of Financial Regulation.
(c)    “Lender” means a licensee or a person who makes a loan subject to this subtitle.
(d)    “Licensee” means a person who is required to be licensed under Title 11, Subtitle 2 of the Financial Institutions Article, the Maryland Consumer Loan Law – Licensing Provisions, regardless of whether the person is actually licensed.
(e)    (1)    “Loan” means any loan or advance of money or credit subject to this subtitle, regardless of whether the loan or advance of money or credit is or purports to be made under this subtitle.
(2)    “Loan” does not include an installment sale agreement as defined in § 12–601 of this title.
(f)    “Person” includes an individual, corporation, business trust, statutory trust, estate, trust, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial entity.
(g)    “Wages” means all remuneration paid to any employee for the employee’s employment, including the cash value of all remuneration paid in any medium other than cash.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-302 - License Required Unless Exempt

A person may not engage in the business of making loans under this subtitle unless the person is licensed under or is exempt from the licensing requirements of Title 11, Subtitle 2 of the Financial Institutions Article, the Maryland Consumer Loan Law -- Licensing Provisions.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-304 - Advertising

(a)    A lender may not directly or indirectly print, publish, distribute, or broadcast any false, misleading, or deceptive statement regarding the rates, terms, or conditions of a loan.
(b)    (1)    If charges or rates of charges are advertised by a licensee, the Commissioner may require him to state them fully and clearly in any manner the Commissioner considers necessary to prevent misunderstanding by a prospective borrower.
(2)    Subject to any condition which the Commissioner may impose to prevent a false impression regarding the scope or degree of protection provided by this subtitle, the Commissioner may permit or require a licensee to refer in his advertising to the fact that his business is under State supervision.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-305 - Discrimination Prohibited

(a)    In granting or denying an application for a loan, a licensee may not discriminate against any loan applicant only on the basis of race, color, creed, national origin, sex, marital status, or age.
(b)    (1)    A licensee is not in violation of this section if the licensee is in compliance with the federal Equal Credit Opportunity Act and the regulations adopted under that act.
(2)    Denying an application for a loan by an applicant who is a minor is not discrimination on the basis of age.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-307 - Collection of Certain Fees

(a)    At the time a loan is made, a lender may collect from the borrower:
(1)    As to any item of the total property that secures a loan:
(i)    The fees paid to a public official or governmental agency for recording or satisfying a mortgage, encumbrance, or lien on any property securing the loan; or
(ii)    An equal or lesser amount for nonfiling insurance premium on any property, or portion of the property, that is not recorded if:
1.    The Insurance Commissioner approves the rates; and
2.    A commission is not paid on the policy; and
(2)    The title insurance premiums or reasonable attorney’s fees paid for searching and insuring the title to any real property securing the loan.
(b)    A lender may collect from the borrower a fee not exceeding $15 if payment is made with a check that is dishonored on the second presentment.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-307.1 - Collection of Certain Fees -- Attorney's Fees and Court Costs

(a)    On any loan with an original principal balance of more than $2,000, if a borrower defaults under the terms of a loan and the lender refers the borrower’s account for collection to an attorney who is not a salaried employee of the lender, and if the note, contract, or other evidence of the loan permits, the lender may charge and collect from the borrower court costs and attorney’s fees not exceeding 15 percent of the amount due and payable under the terms of the loan.
(b)    On any loan with an original principal balance of $2,000 or less, if a borrower defaults under the terms of a loan and the lender refers the borrower’s account for collection to an attorney who is not a salaried employee of the lender, and if the note, contract, or other evidence of the loan permits, the lender may recover from the borrower court costs and attorney’s fees not exceeding 15 percent of the amount due and payable under the terms of the loan, to be set by the court in the event of the filing of suit.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-308 - Duties of Lender

(a)    (1)    At the time a loan is made, the lender shall deliver to the borrower a statement in the English language which:
(i)    Quotes §§ 12–306, 12–307, and 12–312 of this subtitle, in their entireties; and
(ii)    Complies with § 12–106(b) of this title.
(2)    If there are two or more borrowers, the lender:
(i)    May deliver the statement to any one of the borrowers; and
(ii)    At the request of any other borrower, shall deliver a copy of the statement to that borrower within 10 days after the request.
(b)    (1)    Except as provided in paragraphs (2), (3), and (4) of this subsection, at the time a lender receives a payment on account of a loan, the lender shall deliver to the person making the payment a receipt which specifies:
(i)    The amount applied to principal;
(ii)    The amount applied to interest and other charges; and
(iii)    The unpaid principal balance of the loan.
(2)    The lender may deliver an unitemized receipt at the time of payment if he delivers the required itemized receipt within 10 days after the payment.
(3)    The lender is not required to issue a receipt if, before the due date of each payment, he regularly delivers to the borrower a billing statement which specifies:
(i)    The previous unpaid principal balance of the loan;
(ii)    The amount and date of each payment made during the billing period;
(iii)    The amount of each of these payments applied to interest;
(iv)    The amount of each of these payments applied to principal;
(v)    The current unpaid principal balance; and
(vi)    The amount and due date of the next maturing installment.
(4)    The lender is not required to issue a receipt if the lender issues to the borrower a payment book or coupon book and payment is made by check or money order.
(c)    (1)    A lender shall permit a borrower to prepay a loan in full or in part at any time, without penalty.
(2)    Each partial prepayment shall be applied:
(i)    First, to any interest accrued on the unpaid principal balance to the date of the payment; and
(ii)    Then, to the unpaid principal balance.
(d)    After full repayment of a loan, the lender shall:
(1)    (i)    Indelibly mark with the word “paid” or “canceled” and return each note, contract, or other evidence of obligation of the borrower in the possession of the lender; or
(ii)    Furnish the borrower with a written statement that identifies the loan transaction and states that the loan has been paid in full;
(2)    Release any mortgage, security agreement, or other form of security instrument which no longer secures any indebtedness to the lender; and
(3)    Restore any pledge or certificate of title.
(e)    At the request of the borrower, the lender shall furnish the borrower with a written statement of the account. However, the lender is not required to do so more than once in any 30–day period.
(f)    A lender making or offering to make a loan secured by residential real property shall comply with § 12–125 of this title, as applicable.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-309 - Loan to Buy Certain Goods or Services Subject to Certain Defenses

(a)    If a lender makes a loan for the purpose of enabling a borrower to buy goods or services used primarily for personal, family, or household purposes, then, in addition to any other claim or defense which the borrower has under this subtitle, the lender is subject to the claims and defenses of the borrower against the seller arising from the sale of the goods or services, if:
(1)    The lender knows that the seller arranged for the extension of credit by the lender; or
(2)    The lender otherwise knowingly participated in the sale.
(b)    In determining that a lender knowingly participated in a sale transaction, the following factors, among others, may be considered:
(1)    The lender was a person related to the seller, unless the relationship was remote or was not a factor in the sale or loan;
(2)    The proceeds of the loan were made payable in whole or in part to the seller;
(3)    The lender took a purchase-money security interest in the goods which were the subject of the sale;
(4)    The seller guaranteed the loan or otherwise assumed the risk of loss by the lender on the loan;
(5)    The lender directly supplied to the seller a form used by the borrower to evidence or secure the loan; or
(6)    The loan was conditioned on purchase by the borrower of the goods or services from the particular seller, but the payment by the lender of any proceeds of the loan to the seller does not establish in itself that the loan was so conditioned.
(c)    (1)    The liability of a lender under this section may not exceed the amount owed to the lender with respect to the sale at the time the lender has notice of a claim or defense of the buyer against the seller.
(2)    If two or more loans are consolidated, the maximum amount owed to the lender under paragraph (1) of this subsection is determined as follows:
(i)    If the consolidated loans arose from sales made on the same day, the payments received after the consolidation are considered to be applied first to the smallest loan; and
(ii)    In any other case, the payments received after the consolidation are considered to be applied first to payment of the loan first made.
(d)    The lender is subrogated to each right and remedy which the borrower has against the seller.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-310 - Collateral Sale, Purchase, or Agreement in Connection With Loan

(a)    For purposes of this subtitle, any profit or advantage which a person contracts for, collects, receives, or obtains by a collateral sale, purchase, or agreement in connection with negotiating, arranging, or making a loan is considered a charge for the loan.
(b)    This section does not apply to any commission, dividend, retrospective rating credit, or other consideration received by a licensee or a licensed insurance producer who is an officer, director, agent, employee, or affiliate of a licensee on insurance sold under this subtitle in accordance with the applicable provisions of the Insurance Article.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-314 - Loans at Greater Than Authorized Rate of Interest

(a)    A person may not lend $25,000 or less if:
(1)    The person directly or indirectly contracts for, charges, or receives a greater rate of interest, charge, discount, or other consideration than that authorized by the laws of this State;
(2)    The transaction violates the federal Military Lending Act; or
(3)    The person is not licensed under or exempt from the licensing requirements under the Maryland Consumer Loan Law – Licensing Provisions.
(b)    (1)    (i)    A loan made in the amount of $25,000 or less, regardless of whether the loan is or purports to be made under this subtitle, is void and unenforceable if:
1.    Except as provided in subparagraph (ii) of this paragraph, a person contracts for a loan that has a rate of interest, charge, discount, or other consideration greater than that authorized under State law;
2.    The loan violates the federal Military Lending Act; or
3.    A person who is not licensed under or exempt from the licensing requirements under Title 11, Subtitle 2 of the Financial Institutions Article made the loan.
(ii)    A loan is not void and unenforceable if:
1.    A clerical error or mistake resulted in the rate of interest, charge, discount, or other consideration being greater than the amount authorized under State law; and
2.    A person corrects the error or mistake before the first payment is due under the loan.
(2)    A person may not receive or retain any principal, interest, fees, or other compensation with respect to any loan that is void and unenforceable under this subsection.
(3)    This subsection does not apply to a person who is exempt from licensing under this subtitle.
(c)    (1)    This section does not apply to a loan transaction validly made in another state in compliance with a similar loan law of that state.
(2)    A lender may not collect an amount that is more than the total amount that would be permitted if this subtitle were applicable.
(3)    This section applies to all loans made by a lender domiciled in another state to a borrower who is a resident of this State if the application for the loan originated in this State.
(d)    With respect to a loan that is void and unenforceable under this section, a person may not:
(1)    Collect or attempt to collect, directly or indirectly, any amount from the borrower;
(2)    Enforce or attempt to enforce the contract against any property securing the loan; or
(3)    Sell, assign, or otherwise transfer the loan to another person.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-316 - Penalty

Any licensee or his officer or employee who knowingly violates any provision of §§ 12–303 through 12–306, § 12–308, § 12–311, or § 12–314 of this subtitle is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500 or imprisonment not exceeding 6 months or both.
2023 Maryland Statutes › Commercial Law › Title 12 - Credit Regulations › Subtitle 3 - Consumer Loans -- Credit Provisions › Section 12-316.1 - Penalty -- Reliance Upon Written Opinions

(a)    A licensee or a person exempt from licensing under this subtitle is not subject to a penalty involving the forfeiture of interest or principal for a violation that arises because the licensee or person exempt from licensing in good faith:
(1)    Performed or omitted to perform an act in conformity with or in reliance upon:
(i)    A written opinion of the Attorney General of Maryland or a regulation adopted by the Commissioner;
(ii)    A written opinion by the Commissioner given on request of the licensee or person exempt from licensing; or
(iii)    An interpretation by the Commissioner in a written notice or examination report; or
(2)    Used a form or procedure that has been approved in writing by the Commissioner and the Attorney General.
(b)    The provisions of subsection (a) of this section do not apply to an act or omission to act that occurs after:
(1)    The opinion, regulation, or interpretation relied on is amended, repealed, or determined to be invalid for any reason by any judicial or other authority; or
(2)    Approval for a form or procedure is amended, rescinded, or determined to be invalid for any reason by any judicial or other authority.
(c)    This section may not be construed to:
(1)    Limit the imposition of any civil or criminal penalty for a knowing or willful violation of this subtitle; or
(2)    Limit the power of the Commissioner or the courts to order a refund to a borrower of moneys collected in violation of this subtitle.