9-A §8-106. Determination of annual percentage rate
Title 9-A: MAINE CONSUMER CREDIT CODE
Article 8: TRUTH-IN-LENDING
Part 1: GENERAL PROVISIONS
§8-106. Determination of annual percentage rate
1. The annual percentage rate applicable to any extension of consumer credit shall be determined, in accordance with the regulations of the administrator:
A. In the case of any extension of credit other than under an open-end credit plan, as:
(i) That nominal annual percentage rate which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balances of the amount financed, calculated according to the actuarial method of allocating payments made on a debt between the amount financed and the amount of the finance charge, pursuant to which a payment is applied first to the accumulated finance charge and the balance is applied to the unpaid amount financed; or
(ii) The rate determined by any method prescribed by the administrator as a method which materially simplifies computation while retaining reasonable accuracy as compared with the rate determined under subparagraph (i); and [1981, c. 243, §25 (NEW).]
B. In the case of any extension of credit under an open-end credit plan, as the quotient, expressed as a percentage, of the total finance charge for the period to which it relates divided by the amount upon which the finance charge for that period is based, multiplied by the number of such periods in a year. [1981, c. 243, §25 (NEW).]
[ 1981, c. 243, §25 (NEW) .]
2. Where a creditor imposes the same finance charge for balances within a specified range, the annual percentage rate shall be computed on the median balance within the range, except that if the administrator determines that a rate so computed would not be meaningful, or would be materially misleading, the annual percentage rate shall be computed on such other basis as the administrator may by regulation require.
[ 1981, c. 243, §25 (NEW) .]
3. The disclosure of an annual percentage rate is accurate for the purposes of this Article if the rate disclosed is within a tolerance not greater than 1/8 of one per cent more or less than the actual rate or rounded to the nearest 1/4 of one per cent. The administrator may allow a greater tolerance to simplify compliance where irregular payments are involved.
[ 1981, c. 243, §25 (NEW) .]
4. The administrator may authorize the use of rate tables or charts which may provide for the disclosure of annual percentage rates which vary from the rate determined in accordance with subsection 1, paragraph A, subparagraph (i) by not more than such tolerances as the administrator may allow. The administrator may not allow a tolerance greater than 8% of that rate except to simplify compliance where irregular payments are involved.
[ 1981, c. 243, §25 (NEW) .]
5. In the case of creditors determining the annual percentage rate in a manner other than as described in subsection 4, the administrator may authorize other reasonable tolerances.
[ 1981, c. 243, §25 (NEW) .]
6. In the case of a tax refund loan, if it is the practice of the creditor to demand repayment upon delivery of the refund, the annual percentage rate is based on the creditor's reasonable estimate of the time the refund will be delivered.
[ 2009, c. 248, §1 (AMD) .]
SECTION HISTORY
1981, c. 243, §§25,26 (NEW). 1981, c. 551, §3 (AMD). 1991, c. 330, §2 (AMD). 2009, c. 248, §1 (AMD).