02-029-142 Me. Code R. § IV

Current through 2024-51, December 18, 2024

Section 029-142-IV - GENERAL PROVISIONS

Except as provided in Section V, a supervised financial organization may assess a prepayment charge to recover the reasonable cost of originating the loan, when a consumer repays a consumer loan, secured by an interest in land, in full prior to the maturity date of the loan, or in the case of open-end credit, when a consumer repays the line to zero and terminates the open-end credit plan prior to the contractual termination date of the open-end credit plan. Prepayment charges that do not exceed "closing costs" as defined in Title 9-A § 1-301(8), excluding prepaid interest, that are actually incurred by the supervised financial organization, but are not charged to the consumer, meet the definition of "reasonable cost of originating the loan" as defined in Subsection A of Section III of this rule. Any prepayment charge assessed in accordance with the foregoing must meet the following two requirements.

A. The dollar amount of the prepayment charge must be disclosed in the note or other document establishing the loan or credit plan. The prepayment charge may not exceed what was disclosed nor may the prepayment charge exceed the total of the reasonable direct and indirect costs of originating the loan that were actually incurred by the supervised financial organization, but were not charged to the consumer.

B. The prepayment charge may only be assessed if the loan is repaid in full within 36 months of the origination date of the loan or the open-end credit plan is repaid to zero and terminated within 36 months of the origination date of the open-end credit plan.

02-029 C.M.R. ch. 142, § IV