2013 Maryland Code
COMMERCIAL LAW
§ 12-610 - Consumer goods -- Maximum finance charge

§12-610.

Except as provided in § 12-609 of this subtitle as to a motor vehicle, and notwithstanding the provisions of any other statutory law, in the retail sale of consumer goods bought under an installment sale agreement, including any add-on contract described in § 12-618 of this subtitle, the finance charge may not exceed the greater of:

(1) An amount computed using the following annual simple interest rates of finance charge:

(i) 22 percent on that part of the outstanding balance not exceeding $1,000; and

(ii) 18 percent on that part of the outstanding balance exceeding $1,000; or

(2) A minimum charge of $10 or, if the date of the last installment is eight months or less after the effective date of the installment sale agreement, $8.

(3) Notwithstanding the provisions of subsection (1) of this section, a seller may charge a finance charge at a rate not in excess of 24 percent per annum simple interest on the outstanding balance under an installment sale agreement made on or after July 1, 1982.

§ 12-610 - 1. Consumer goods -- Refinancing of agreement at higher rate

Any agreement made before July 1, 1982, which is refinanced at a higher rate allowed by § 12-609(f) or § 12-610(3) of this subtitle must comply with the following requirements:

(1) The holder must give the following disclosures in writing to the buyer prior to the execution by the buyer of the new agreement:

If you do agree to consolidate your existing obligation, 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 Purchase Agreements Consolidated Purchase Agreement

$ ... per month for $ ... per month for

the next ... months the next ... months

then

$ ... per month for

... months after that

Total of Payments

Separate Agreements Consolidated Agreement

$ ... total of $ ... total of payments

payments for your for your consolidated

existing purchases purchases

... total of payments

for your new purchases

(2) The holder must allow the buyer the choice of repaying his existing purchase balance at the originally agreed upon rate and obtaining any additional extension of credit as a separate agreement, notwithstanding any law which limits the holder's ability to have more than 1 agreement with the same buyer;

(3) An existing balance may be refinanced only upon the buyer's request;

(4) The holder must refund or credit to the buyer's account any unearned finance charge and any returned insurance premiums upon the cancellation of insurance sold in connection with the purchases;

(5) The holder must allow the buyer the right to cancel the consolidated purchase agreement within 3 business days and to elect the separate account option pursuant to subsection (2). The holder shall provide to the buyer conspicuous notice of the provisions of this subsection; and

(6) Nothing in this subsection shall prohibit the receipt of goods or services by the buyer at the time the consolidated purchase agreement is made.

§ 12-610 - 2. Consumer goods -- Change in finance charge prohibited

A holder may not enter into a retail installment sales agreement, providing for an initial rate of finance charge pursuant to § 12-609 (f) or § 12-610 (3) of this subtitle, which contains a provision that permits the holder to increase or decrease the applicable rate of finance charge from time to time during the term of an agreement.