6-637

6-637. Term; payments

A. The scheduled term of a consumer loan shall not be longer than the following:

1. Twenty-four months and fifteen days from the date of making a consumer loan of
one thousand dollars or less.

2. Thirty-six months and fifteen days from the date of making a consumer loan of
more than one thousand dollars but not more than two thousand five hundred dollars.

3. Forty-eight months and fifteen days from the date of making a consumer loan of
more than two thousand five hundred dollars but not more than four thousand dollars.

4. Sixty months and fifteen days from the date of making a consumer loan of more
than four thousand dollars but not more than six thousand dollars.

5. Any agreed on time period for a consumer loan of more than six thousand dollars.

B. The note evidencing a consumer loan shall provide for the scheduled repayment of
principal and finance charges in approximately equal periodic installments.

C. Pursuant to the provisions of 12 United States Code section 3804, subsections A
and B of this section shall not be superseded by the provisions of 12 United States Code
section 3803.

D. Balloon payments, prepayment penalties, call options and other contract
provisions that permit a consumer lender to accelerate payment of a consumer revolving
loan or home equity revolving loan for any reason other than the consumer's default as
provided in the agreement evidencing the consumer revolving loan or home equity revolving
loan are prohibited, except that a licensee may include a call option to be exercised at
least fifteen years after the date of the agreement. If the licensee exercises this call
option and the consumer revolving loan or home equity revolving loan is not in default,
the licensee shall amortize the amount due on the account over at least sixty monthly
installments.

E. Except as provided in subsection D of this section, an agreement evidencing a
consumer revolving loan or home equity revolving loan shall provide that on termination
of the right to obtain advances the outstanding principal balance and finance charges at
the time of termination of the right to obtain advances are repayable in installments if
a consumer is not in default as provided in the agreement. These installments shall
provide for the scheduled repayment of principal and finance charges in approximately
equal periodic installments except as a result of an adjustment in the index on which a
variable rate of periodic finance charges is based. These installments are payable
within the following time limits:

1. Twenty-four months and fifteen days from the date of termination of the right to
obtain advances for an outstanding principal balance on that date of one thousand
dollars or less.

2. Thirty-six months and fifteen days from the date of termination of the right to
obtain advances for an outstanding principal balance on that date that is more than one
thousand dollars but not more than two thousand five hundred dollars.

3. Forty-eight months and fifteen days from the date of termination of the right to
obtain advances for an outstanding principal balance on that date that is more than two
thousand five hundred dollars but not more than four thousand dollars.

4. Sixty months and fifteen days from the date of termination of the right to
obtain advances for an outstanding principal balance on that date that is more than four
thousand dollars but not more than six thousand dollars.

5. Any agreed on time period for an outstanding principal balance that is more than
six thousand dollars on the date of termination of the right to obtain advances.

F. A licensee shall permit a consumer to prepay any scheduled installment or
additional amount due on any consumer lender loan in advance at any time during the
licensee's regular business hours, but the licensee may apply that prepayment first to
all finance charges accrued through the date of that prepayment.

G. On payment in full or renewal of a consumer lender loan, the licensee shall
provide written notice of payment and release to the consumer, or if more than one
consumer is obligated on the consumer lender loan, to any one of the consumers. The
notice of payment and release shall include the date of the original note or agreement
evidencing the consumer lender loan and the date of payment in full. In lieu of the
notice of payment and release, the licensee may return the original note or agreement
evidencing the consumer lender loan marked paid or renewed, as applicable. The licensee
shall release any lien or security interest on property securing a consumer lender loan
that is paid in full as provided in section 33-707 for real property and section 47-9513
for personal property. This subsection does not apply to a consumer revolving loan or
home equity revolving loan on which there is no unpaid balance if the consumer's right to
receive advances on the account continues in effect.