Section 12-505.1 - Maximum finance charge - Closed end account - Refinancing at higher rateAny closed end account made prior to July 1, 1982 which is refinanced at a higher rate pursuant to § 12-505(a)(3) of this subtitle must comply with the following requirements:
(1) The holder must give the following disclosure in writing to the buyer prior to the execution by the buyer of the new retail credit account agreement: If you do agree to consolidate your existing account, 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 holder must allow the buyer the choice of repaying his existing account balance at the originally agreed upon rate and obtaining any additional extension of credit as a separate account, notwithstanding any law which limits the holder's ability to establish more than 1 account for the same buyer;(3) An account 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 obligation;(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.