6-632. Finance charges
A. A licensee may contract for and receive finance charges on consumer loans that
are not more than the following amounts:
1. On a consumer loan in an original principal amount of one thousand dollars or
less, a consumer loan rate of thirty-six per cent.
2. On a consumer loan in an original principal amount of more than one thousand
dollars either:
(a) A consumer loan rate of thirty-six per cent on the initial five hundred dollars
of the original principal amount, and a consumer loan rate of twenty-four per cent on
that part of the principal amount greater than five hundred dollars.
(b) The single blended consumer loan rate that results from the total amount of
finance charges that the licensee would receive through the scheduled maturity of the
consumer loan at the consumer loan rates that otherwise would be applicable pursuant to
subdivision (a) of this paragraph to the different portions of the unpaid principal
balance, assuming that the consumer loan will be paid according to its agreed terms.
B. A licensee may contract for and receive periodic finance charges on consumer
revolving loans and home equity revolving loans that are not more than the following
amounts:
1. On consumer revolving loans with credit limits of one thousand dollars or less,
a periodic rate corresponding to an annual percentage rate of thirty-six per cent on the
outstanding balance each monthly billing cycle.
2. On consumer revolving loans with credit limits of more than one thousand dollars
and home equity revolving loans either:
(a) A periodic rate corresponding to an annual percentage rate of thirty-six per
cent on that portion of the outstanding balance each monthly billing cycle that is not
more than five hundred dollars and a periodic rate corresponding to an annual percentage
rate of twenty-four per cent on that portion of the outstanding balance each monthly
billing cycle that is more than five hundred dollars.
(b) A periodic rate corresponding to the single blended annual percentage rate that
would result in a periodic finance charge during a monthly billing cycle that is not more
than the finance charges that result from the application of the multiple periodic rates
authorized by subdivision (a) of this paragraph.
C. A licensee may charge a fixed or variable rate of periodic finance charges on a
consumer revolving loan or a home equity revolving loan, as provided by the agreement
that establishes the consumer revolving loan or home equity revolving loan. The licensee
shall not base a variable rate of periodic finance charges on an index that is under the
control of the licensee. Unless the consumer can readily verify the index on which an
adjustment in the rate of periodic finance charges is based, the licensee shall provide
conspicuous notice of the rate adjustment at least one monthly billing cycle before the
effective date of the rate adjustment. The licensee may include a rate adjustment notice
on or with a periodic statement to the consumer. The corresponding annual percentage rate
of periodic finance charges may not increase or decrease more than three percentage
points in any period of twelve consecutive months and the corresponding annual percentage
rate of periodic finance charges may not increase or decrease more than seven percentage
points above or below the initial annual percentage rate of periodic finance charges at
the time the consumer revolving loan or home equity revolving loan is established.
D. Except as permitted by subsection E, prepaid finance charges commonly referred
to as points are prohibited.
E. In addition to the finance charges authorized in subsections A, B and C, a
licensee may contract for and receive, and collect finance charges on, nonrefundable
prepaid finance charges or fees commonly referred to as points in an amount of not more
than:
1. Four per cent of the original principal amount of a consumer loan of at least
five thousand dollars secured by the consumer's principal residence.
2. Four per cent of the agreed on credit limit of a home equity revolving loan.
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