Public Law, Chapter 273, Part C, 123rd Legislature, First Regular Session

Chapter 273 H.P. 1301 - L.D. 1869

PART C

Sec. C-1. 9-A MRSA §1-202, sub-§8, ¶A, as amended by PL 1997, c. 64, §1, is further amended to read:

A. With respect to advances of additional funds on the loan or credit sale made more than 30 days after the initial advance, this exclusion applies only to advances made:

(1) Pursuant to the terms of a construction financing agreement;

(2) To protect the security or to perform the covenants of the consumer;

(3) As negative amortization of principal under the terms of the financing agreement;

(4) From funds withheld at consummation pending the resolution of matters that otherwise would tend to delay or prevent closing, including, without limitation, remedy of title defects or repairs to meet appraisal standards; or

(5) Pursuant to the terms of a reverse mortgage transaction, as defined in section 8-103, subsection 1 1-A, paragraph H-1 X, if the transaction is made pursuant to a commitment to purchase issued by, or is in a form approved for purchase by, any state or federal agency, instrumentality or government-sponsored enterprise, including, without limitation, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation;

Sec. C-2. 9-A MRSA §2-509, as amended by PL 2007, c. 99, §1, is further amended to read:

§ 2-509. Right to prepay

Subject to the provisions on rebate upon prepayment, section 2-510, the consumer may prepay, in full or in part, the unpaid balance of a consumer credit transaction at any time without penalty, except for minimum charges as permitted by law. Notwithstanding any other provision of this Title, a reasonable charge may be assessed upon a consumer related to prepayment of a consumer loan made by a supervised financial organization and secured by an interest in land, other than a high-rate, high-fee mortgage, as defined in section 8-103, subsection 1 1-A, paragraph F-1 P, if the charge is reasonably calculated to offset the cost of origination of the loan. The administrator shall adopt rules to implement this section. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

Sec. C-3. 9-A MRSA §8-104, sub-§4, as enacted by PL 1997, c. 155, Pt. C, §2, is amended to read:

4. The administrator may exempt, by rule, from all or part of this Title any class of transactions, other than transactions involving a mortgage described in section 8-103, subsection 1 1-A, paragraph F-1 P, for which, in the determination of the administrator, coverage under all or part of this Title does not provide a meaningful benefit to consumers in the form of useful information or protection. In determining which classes of transactions to exempt in whole or in part under this subsection, the administrator shall consider the following factors:

A. The amount of the loans and whether the disclosures, right of rescission and other provisions provide a benefit to the consumers who are parties to such transactions, as determined by the administrator;

B. The extent to which the requirements of this Title complicate, hinder or make more expensive the credit process for the class of transactions;

C. The status of the borrowers, including:

(1) Any related financial arrangements of the borrowers, as determined by the administrator;

(2) The financial sophistication of the borrowers relative to the type of transaction; and

(3) The importance to the borrowers of the credit, related supporting property and coverage under this Title, as determined by the administrator;

D. Whether a loan is secured by the principal residence of the consumer; and

E. Whether the goal of consumer protection would be undermined by such an exemption.

Sec. C-4. 9-A MRSA §8-105, sub-§6, ¶B, as enacted by PL 1995, c. 614, Pt. B, §3 and affected by §4, is amended to read:

B. For purposes of section 8-204:

(i) If, except as provided in subparagraph (ii), the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to 1/2 of 1% of the total amount of credit extended; or

(ii) In the case of a transaction, other than a high-rate, high-fee mortgage as defined in section 8-103, subsection 1 1-A, paragraph F-1 P, that:

(a) Is a refinancing of the principal balance then due and any accrued and unpaid finance charges of a residential mortgage transaction, as defined in section 8-103, subsection 1 1-A, paragraph H W, or is any subsequent refinancing of such a transaction; and

(b) Does not provide any new consolidation or new advance, if the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to 1% of the total amount of credit extended.

Sec. C-5. 9-A MRSA §8-106-A, as enacted by PL 1995, c. 326, §4, is amended to read:

§ 8-106-A. Number of percentage points

1. Beginning 2 years after the effective date of the regulations adopted under the federal Riegle Community Development and Regulatory Improvement Act of 1994, Public Law No. 103-325, Section 155, 108 Stat. 2160, 2197 (1994) and no more often than biennially after the first increase or decrease in the number of percentage points under this section, the administrator may by rule increase or decrease the number of percentage points specified in section 8-103, subsection 1 1-A, paragraph F-1, subparagraph (1) P if the administrator determines that the increase or decrease is:

A. Consistent with the consumer protection against abusive lending provided by amendments made by the federal Riegle Community Development and Regulatory Improvement Act of 1994, Title I, subtitle B, Public Law No. 103-325, 108 Stat. 2160, 2190 (1994); and

B. Warranted by the need for credit.

2. An increase or decrease under subsection 1 may not result in the number of percentage points referred to in subsection 1 being less than 8 percentage points or greater than 12 percentage points.

3. In determining whether to increase or decrease the number of percentage points referred to in subsection 1, the administrator shall consult with representatives of consumers, including low-income consumers, and lenders.

The dollar amount specified in section 8-103, subsection 1 1-A, paragraph F-1, subparagraph (2) P must be adjusted annually on January 1st by the annual percentage change in the Consumer Price Index, as reported on June 1st of the year preceding the adjustment.

This section may not be construed to limit the rate of interest or the finance charge that a person may charge a consumer for an extension of credit.

Sec. C-6. 9-A MRSA §8-204, sub-§5, ¶A, as enacted by PL 1981, c. 243, §25, is amended to read:

A. A residential mortgage transaction as defined in section 8-103, subsection 1 1-A, paragraph H W;

Sec. C-7. 9-A MRSA §8-206-A, sub-§15, as enacted by PL 1995, c. 326, §5, is amended to read:

15. The administrator may, by rule or order, exempt specific mortgage products or categories of mortgages from any of the prohibitions specified in subsections 6 to 13 10 and 11-A if the administrator finds that the exemption:

A. Is in the interest of the borrowing public; and

B. Applies only to products that maintain and strengthen home ownership and equity protection.

Sec. C-8. 9-A MRSA §8-209, sub-§4, ¶A, as enacted by PL 1995, c. 614, Pt. A, §14, is amended to read:

A. Any person who purchases or is otherwise assigned a high-rate, high-fee mortgage, as defined in section 8-103, subsection 1 1-A, paragraph F-1 P, is subject to all claims and defenses with respect to that mortgage that the consumer may assert against the creditor of the mortgage, unless the purchaser or assignee demonstrates by a preponderance of the evidence that a reasonable person exercising ordinary due diligence could not determine, based on the documentation required by this Title, the itemization of the amount financed and other disclosure of disbursements, that the mortgage was a high-rate, high-fee mortgage. This paragraph does not affect rights of a consumer under subsection 1, 2 or 3 or any other provision of this Title.

Sec. C-9. 9-A MRSA §8-209, sub-§4, ¶D, as enacted by PL 1995, c. 614, Pt. A, §14, is amended to read:

D. Any person who sells or otherwise assigns a high-rate, high-fee mortgage, as defined in section 8-103, subsection 1 1-A, paragraph F-1 P, shall include a prominent notice of the potential liability under this subsection as determined by the administrator.

Sec. C-10. 10 MRSA §1141, sub-§2, as enacted by PL 1991, c. 261, is amended to read:

2. Credit card issuer. "Credit card issuer" has the same meaning as "card issuer," as defined in Title 9-A, section 8-103, subsection 1 1-A, paragraph D H.

Sec. C-11. Appropriations and allocations. The following appropriations and allocations are made.

PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF

Office of Consumer Credit Regulation 0091

Initiative: Allocates funds for a Chief Field Investigator position with responsibility for investigating complex allegations of mortgage-related violations, including directing and overseeing the office's fact-gathering process, and for supervising the investigative activities of existing compliance examination staff and allocates for a Staff Attorney position with responsibility for compliance and enforcement as provided under the Maine Revised Statutes, Title 9-A, section 8-206-F.

OTHER SPECIAL REVENUE FUNDS	2007-08	2008-09
POSITIONS - LEGISLATIVE COUNT	2.000	2.000
Personal Services	$111,196	$156,841
All Other	$22,514	$20,144

OTHER SPECIAL REVENUE FUNDS TOTAL	$133,710	$176,985

Office of Consumer Credit Regulation 0091

Initiative: Allocates funds for the reclassification of the Director of the Office of Consumer Credit Regulation position to Superintendent of Consumer Credit Protection.

OTHER SPECIAL REVENUE FUNDS	2007-08	2008-09
Personal Services	$8,061	$15,785

OTHER SPECIAL REVENUE FUNDS TOTAL	$8,061	$15,785

PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF
DEPARTMENT TOTALS	2007-08	2008-09

OTHER SPECIAL REVENUE FUNDS	$141,771	$192,770

DEPARTMENT TOTAL - ALL FUNDS	$141,771	$192,770

Public Laws

123rd Legislature

First Regular Session

Chapter 273

H.P. 1301 - L.D. 1869