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Chapter 200, RULE ON RE-FINANCING MULTIPLE TRANSACTIONS

SUMMARY

The Office of Consumer Credit Regulation originally promulgated Rule Chapter 200 to establish a formula for use when re-financing multiple transactions.  Rule 200 is now repealed due to changes in the law on which the rule is based.  The formula found in the rule is not relevant to current law.

Rule 200 was originally promulgated under the authority of 9-A M.R.S.A. §6-403 and 6-409.  Sections 6-403 and 6-409 were repealed in 1986.

I.  AUTHORITY:

Title 9-A M.R.S.A. §6-104 permits the Administrator to adopt, amend, and repeal rules to carry out the specific provisions of the Consumer Credit Code.

Title 9-A M.R.S.A. §6-103 and 1-301(2) state that except in cases in which a supervised financial organization is the creditor, the Administrator is the Director of the Office of Consumer Credit Regulation.  In cases in which a supervised financial organization is the creditor, the Administrator is the Superintendent of Financial Institutions.

Title 9-A M.R.S.A. §6-105 states that with respect to supervised financial organizations, all powers of the Administrator under Title 9-A must be exercised by the Superintendent of the Bureau of Financial Institutions.

Title 9-B M.R.S.A. §215 permits the Superintendent of the Bureau of Financial Institutions to implement rules relating to the supervision of financial institutions or their subsidiaries or financial institution holding companies or their subsidiaries.

This rule does not have a separate Bureau of Financial Institutions chapter number.  The chapter is applicable to supervised financial organizations under 9-A. M.R.S.A. §6-104(6).  The Bureau of Financial Institutions joins in this rulemaking to make clear that the repeal of the Office of Consumer Credit Regulation Chapter 200 applies to supervised financial organizations.  Pursuant to §6-104(6), "unless… modified by the Superintendent of Financial Institutions," a rule as adopted by the Office of Consumer Credit Regulation will remain applicable to supervised financial organizations.

II.  PURPOSE

Rule 200 established a formula based on 9-A M.R.S.A. §2-504 for calculating the maximum rate at which a lender could re-finance multiple consumer credit transactions. The limitation provided that a re-finance rate could not exceed the rate charged in the original loan agreement by more than ¼%.  Because §2-504 no longer contains the rate increase limitation on which the formula was based, Rule 200 is unnecessary.  Re-financing rates are now limited by the provisions on finance charges found in 9-A M.R.S.A. §2-201 and 2-401.  Those are the same limitations imposed on loan consolidations by 9-A M.R.S.A. §2-505.

Given the statutory changes, the definitions of "re-financing" and "consolidation" found in the original rule are also unnecessary.  The definitions were created to determine which transactions were subject to the unique rate limitations on re-financing imposed by § 2-504.  The definitions are no longer useful because re-financings are not subject to unique rate limitations under current law.  Finally, the rule is not necessary to explain that § 2-504 and 2-505 provide lenders and borrowers with the ability to re-finance and to consolidate multiple transactions.

III. GENERAL PROVISIONS

Chapter 200 of the Rules of the Maine Office of Consumer Credit Regulation is repealed.

IV. EFFECTIVE DATE

 

Last Updated: June 5, 2013