9-A §8-206. Consumer credit not under open-end credit plans - Maine Statutes

Title 9-A: MAINE CONSUMER CREDIT CODE

Article 8: TRUTH-IN-LENDING

Part 2: DISCLOSURE REQUIREMENTS

§8-206. Consumer credit not under open-end credit plans

1. For each consumer credit transaction other than under an open-end credit plan, the creditor shall disclose each of the following items, to the extent applicable:

A. The identity of the creditor required to make disclosure; [1981, c. 243, §25 (NEW).]

B. The "amount financed," using that term, which shall be the amount of credit of which the consumer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures conspicuously segregated in accordance with subsection 2:

(i) Take the principal amount of the loan or the case price less down payment and trade-in;

(ii) Add any charges which are not part of the finance charge or of the principal amount of the loan and which are financed by the consumer, including the cost of any items excluded from the finance charge pursuant to section 8-105; and

(iii) Subtract any charges which are part of the finance charge but which will be paid by the consumer before or at the time of the consummation of the transaction, or have been withheld from the proceeds of the credit; [1981, c. 243, §25 (NEW).]

C. In conjunction with the disclosure of the amount financed, a creditor shall provide a statement of the consumer's right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a "yes" and "no" indication to be initialed by the consumer to indicate whether the consumer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the creditor shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For the purposes of this paragraph, "itemization of the amount financed" means a disclosure of the following items, to the extent applicable:

(i) The amount that is or will be paid directly to the consumer;

(ii) The amount that is or will be credited to the consumer's account to discharge obligations owed to the creditor;

(iii) Each amount that is or will be paid to 3rd persons by the creditor on the consumer's behalf, together with an identification of or reference to the 3rd person; and

(iv) The total amount of any charges described in paragraph B, subparagraph (iii); [1981, c. 243, §25 (NEW).]

D. The "finance charge," not itemized, using that term; [1981, c. 243, §25 (NEW).]

E. The finance charge expressed as an "annual percentage rate," using that term. This is not required if the amount financed does not exceed $75 and the finance charge does not exceed $5, or if the amount financed exceeds $75 and the finance charge does not exceed $7.50; [1981, c. 243, §25 (NEW).]

F. The sum of the amount financed and the finance charge, which shall be termed the "total of payments;" [1981, c. 243, §25 (NEW).]

G. The number, amount and due dates or period of payments scheduled to repay the total of payments; [1981, c. 243, §25 (NEW).]

H. In a sale of property or services in which the seller is the creditor required to disclose pursuant to section 8-201, subsection 2, the "total sale price," using that term, which shall be the total of the cash price of the property or services, additional charges and the finance charge; [1981, c. 243, §25 (NEW).]

I. Descriptive explanations of the terms "amount financed," "finance charge," "annual percentage rate," "total of payments" and "total sale price" as specified by the administrator. The descriptive explanation of "total sale price" shall include reference to the amount of the down payment; [1981, c. 243, §25 (NEW).]

J. Where the credit is secured, a statement that a security interest has been taken in:

(i) The property which is purchased as part of the credit transaction; or

(ii) Property not purchased as part of the credit transaction identified by item or type; [1981, c. 243, §25 (NEW).]

K. Any dollar charge or percentage amount which may be imposed by a creditor solely on account of a late payment, other than a deferral or extension charge; [1981, c. 243, §25 (NEW).]

L. A statement indicating whether or not the consumer is entitled to a rebate of any finance charge upon refinancing or prepayment in full pursuant to acceleration or otherwise, if the obligation involves a precomputed finance charge. A statement indicating whether or not a penalty will be imposed in those same circumstances if the obligation involves a finance charge computed from time to time by application of a rate to the unpaid principal balance; [1981, c. 243, §25 (NEW).]

M. A statement that the consumer should refer to the appropriate contract document for any information such document provides about nonpayment, default, the right to accelerate the maturity of the debt and prepayment rebates and penalties; [1997, c. 155, Pt. C, §4 (AMD).]

N. In any residential mortgage transaction, a statement indicating whether a subsequent purchaser or assignee of the consumer may assume the debt obligation on its original terms and conditions; and [1997, c. 155, Pt. C, §4 (AMD).]

O. In the case of a variable interest rate residential mortgage transaction, in disclosures provided at application as prescribed by the administrator for a variable rate transaction secured by the consumer's principal dwelling, at the option of the creditor, a statement that the periodic payments may increase or decrease substantially, and the maximum interest rate and payment for a $10,000 loan originated at a recent interest rate, as determined by the administrator, assuming the maximum periodic increases in rates and payments under the program, or a historical example illustrating the effects of interest rates changes implemented according to the loan program. [1997, c. 155, Pt. C, §5 (NEW).]

[ 1997, c. 155, Pt. C, §§4, 5 (AMD) .]

2. Except as otherwise provided in this Article, the disclosures required under subsection 1 shall be made before the credit is extended. Except for the identity of the creditor, all disclosures required under subsection 1 and any disclosure provided for in section 8-105, subsection 2, 3 or 4 shall be conspicuously segregated from all other terms, data or information provided in connection with a transaction, including any computations or itemization.

[ 1981, c. 243, §25 (NEW) .]

3. The following provisions apply to an extension of credit secured by the consumer's dwelling, other than an open-end credit plan:

A. Except as provided in paragraph G, in the case of any extension of credit that is secured by the dwelling of a consumer, which is also subject to the Real Estate Settlement Procedures Act of 1974, 12 United States Code, Section 2601 et seq., good faith estimates of the disclosures required under subsection 1 must be made in accordance with rules of the administrator under section 8-201, subsection 3 and must be delivered or placed in the mail not later than 3 business days after the creditor receives the consumer's bona fide application, which must be at least 7 business days before consummation of the transaction. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

B. If the disclosure statement furnished within 3 days of the bona fide application indicates that the consumer will not be assessed a prepayment penalty, and if that statement is subsequently rendered inaccurate, the creditor shall notify the consumer of that change as soon as practicable and shall also furnish a corrected statement prior to the time of settlement or consummation. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

C. In the case of an extension of credit that is secured by the dwelling of a consumer, the disclosures provided under paragraph A are in addition to the other disclosures required by subsection 1, and must:

(1) Include in conspicuous type size and format, the following statement: "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application."; and

(2) Be provided in the form of final disclosures at the time of consummation of the transaction, in the form and manner prescribed by this section. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

D. Beginning December 30, 2010, in the case of an extension of credit that is secured by the dwelling of a consumer, under which the annual rate of interest is variable or with respect to which the regular payments may otherwise be variable, in addition to the other disclosures required by subsection 1, the disclosures provided under this subsection must:

(1) Label the payment schedule as follows: "Payment Schedule: Payments Will Vary Based on Interest Rate Changes."; and

(2) State in conspicuous type size and format examples of adjustments to the regular required payment on the extension of credit based on the change in the interest rates specified by the contract for such extension of credit. Among the examples required to be provided under this subparagraph is an example that reflects the maximum payment amount of the regular required payments on the extension of credit, based on the maximum interest rate allowed under the contract, in accordance with the rules of the administrator. Prior to issuing any rules pursuant to this subparagraph, the administrator shall review consumer testing conducted by the Board of Governors of the Federal Reserve System to determine the appropriate format for providing the disclosures required under this subparagraph to consumers so that such disclosures can be easily understood, including the fact that the initial regular payments are for a specific time period that will end on a certain date, that payments will adjust afterwards potentially to a higher amount and that there is no guarantee that the borrower will be able to refinance to a lower amount. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

E. In any case in which the disclosure statement under paragraph A contains an annual percentage rate of interest that is no longer accurate, as determined under section 8-106, subsection 3, the creditor shall furnish an additional, corrected statement to the borrower, not later than 3 business days before the date of consummation of the transaction. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

F. The consumer must receive the disclosures required under this subsection before paying any fee to the creditor or other person in connection with the consumer's application for an extension of credit that is secured by the dwelling of a consumer. If the disclosures are mailed to the consumer, the consumer is considered to have received them 3 business days after they are mailed. A creditor or other person may impose a fee for obtaining the consumer's credit report before the consumer has received the disclosures under this subsection, provided the fee is bona fide and reasonable in amount. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

G. To expedite consummation of a transaction, if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency, the consumer may waive or modify the timing requirements for disclosures under paragraph A, as long as:

(1) The term “bona fide personal emergency” may be further defined in rules issued by the administrator;

(2) The consumer provides to the creditor a dated, written statement describing the emergency and specifically waiving or modifying those timing requirements, which statement must bear the signature of all consumers entitled to receive the disclosures required by this subsection; and

(3) The creditor provides to the consumer at or before the time of such waiver or modification the final disclosures required by subsection 1. [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

H. The requirements of paragraphs C to G do not apply to extensions of credit relating to time-share estates as described in Title 33, section 591, subsection 7, or time-share plans as described in 11 United States Code, Section 101(53D). [2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (NEW).]

[ 2009, c. 362, Pt. A, §16 (AFF); 2009, c. 362, Pt. A, §8 (RPR) .]

4. If a creditor receives a purchase order by mail or telephone without personal solicitation, and the cash price and the total sale price and the terms of financing, including the annual percentage rate, are set forth in the creditor's catalog or other printed material distributed to the public, then the disclosures required under subsection 1 may be made at any time not later than the date the first payment is due.

[ 1981, c. 243, §25 (NEW) .]

5. If a creditor receives a request for a loan by mail or telephone without personal solicitation and the terms of financing, including the annual percentage rate for representative amounts of credit, are set forth in the creditor's printed material distributed to the public or in the contract of loan or other printed material delivered to the obligor then the disclosures required under subsection 1 may be made at any time not later than the date the first payment is due.

[ 1981, c. 243, §25 (NEW) .]

6. If a consumer credit sale is one of a series of consumer credit sales transactions made pursuant to an agreement providing for the addition of the total sale price of that sale to an existing outstanding balance, and the person to whom the credit is extended has approved in writing both the annual percentage rate or rates and the method of computing the finance charge or charges, and the creditor retains no security interest in any property as to which he has received payments aggregating the amount of the sales price including any finance charges attributable therto, then the disclosure required under subsection 1 for the particular sale may be made at any time not later than the date the first payment for that sale is due. For the purposes of this subsection, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in the case of items purchased on the same date, the lowest priced shall be deemed first paid for.

[ 1981, c. 243, §25 (NEW) .]

SECTION HISTORY

1981, c. 243, §§25,26 (NEW). 1981, c. 551, §3 (AMD). 1997, c. 155, §§C4, 5 (AMD). 2007, c. 273, Pt. A, §41 (AFF). 2007, c. 273, Pt. A, §5 (AMD). 2009, c. 362, Pt. A, §16 (AFF). 2009, c. 362, Pt. A, §8 (AMD).