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Barbara Reid Alexander (207)289-3731
Offices located at:
Harry W. Giddinge Central Building
DEPUTY SUPERINTENDENT Hallowell Annex
DEPARTMENT OF BUSINESS REGULATION
BUREAU OF CONSUMER PROTECTION
STATE HOUSE STATION 35
AUGUSTA, MAINE 04333
ADVISORY RULING #62
DECEMBER 4, 1981
December 4, 1981
You have asked whether Section 1-202(7) of the Consumer Credit Code (9-A M.R.S.A.) encompasses the Maine Guaranteed Parental Loan Program and is, therefore, exempt from Articles I-VI of the Code. The MGPLP is a program by which loans are made to the parents who then use these loan proceeds to fund higher education expenses for their children. The loans are made by financial institutions and guaranteed by the State. The problem arises because Section 1-202(7) describes the exemption in terms of a "loan made for the purpose of financing expenses related to the borrower's attendance at an institution of post-secondary education..." (emphasis added).
This exemption to the Code was a non-uniform one, i.e., it was not part of the Uniform Consumer Credit Code adopted by other states. There is no question, however, that its purpose was to exempt federal (or state) guaranteed education loans.
The Bureau is of the opinion that the MGPLP should and will be treated as if exempt pursuant to Section 1-202(7). However, because this section refers to the "borrower's attendance," we are unable to guarantee that an individual might not challenge this matter in a private action. You may want to seek legislative clarification to avoid this possibility.
/s/ Barbara R. Alexander
Barbara R. Alexander