§ 12-114.1
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/md/commercial-law/12-114-1·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§12–114.1.
(1)In this section the following words have the meanings indicated.
(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.
(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.
(1)A covered loan made by an unlicensed person is void and unenforceable.
(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.