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09.03.10 - Financial Regulation - Proposed Regulations

PROPOSED ACTION ON REGULATIONS
MARYLAND REGISTER, VOLUME 47, ISSUE 1,
FRIDAY, JANUARY 3, 2020

Title 09 DEPARTMENT OF LABOR

Subtitle 03 COMMISSIONER OF FINANCIAL REGULATION

09.03.10 Credit and Other Regulation

Authority: Business Regulation Article, §2-105; Financial Institutions Article, §§2-105.1 and 11-203; Annotated Code of Maryland

Notice of Proposed Action
[20-012-P]

The Commissioner of Financial Regulation proposes to adopt new Regulation .04 under COMAR 09.03.10 Credit and Other Regulation.

Statement of Purpose

The purpose of this action is to clarify the types of loans that are subject to Financial Institutions Article, §11-219, Annotated Code of Maryland, which constitutes a step towards the modernization of Maryland’s consumer credit licensing structure. The proposed regulation should provide clarity for the industry and the Commissioner by eliminating the basis for the current practice of licensees seeking, and the Commissioner issuing, duplicative licenses under the existing rules.

Comparison to Federal Standards

There is no corresponding federal standard to this proposed action.

Estimate of Economic Impact

I. Summary of Economic Impact. Maryland business will be positively impacted by this regulation because it clarifies an existing ambiguity that has resulted in businesses seeking and the Commissioner issuing a consumer loan license and an installment loan license, when only one license should be required.

Revenue (R+/R-)
 
II. Types of Economic
Impact.
Expenditure
(E+/E-)
Magnitude

A. On issuing agency: (R-) Minimal
 
B. On other State agencies: NONE  
 
C. On local governments: NONE
Benefit (+)
Cost (-)
Magnitude

D. On regulated industries or trade groups: (-) Minimal
 
E. On other industries or trade groups: NONE
 
F. Direct and indirect effects on public: NONE  

III. Assumptions. (Identified by Impact Letter and Number from Section II.)

A. Due to the elimination of duplicative licensing, based on current licensing figures, 39 licensees will save an aggregate amount of approximately $33,150 (i.e., $850 each) in licensing fees annually. The Commissioner will lose the same amount in revenue. However, due to the reduction in processing 39 duplicate renewal licenses, the Commissioner believes there will be a negligible impact on capacity and overall expenditures.

D. Due to the elimination of duplicative licensing, based on current licensing figures, 39 licensees will save an aggregate amount of approximately $33,150 (e.g., $850 each) in licensing fees annually. Several regulated industries will benefit from the decreased costs that result from the elimination of the requirement of obtaining duplicative licenses. Thus, certain licensees that pay those duplicative fees will save the annual $850 licensing fee in such cases—for an annual total aggregate savings of $33,150.

Economic Impact on Small Businesses

The proposed action has a meaningful economic impact on small business. An analysis of this economic impact follows.Maryland small businesses will benefit from the clarification. However, the number of small businesses that will be affected positively cannot be estimated.

Impact on Individuals with Disabilities

The proposed action has no impact on individuals with disabilities.

Opportunity for Public Comment

Comments may be sent to Jedd Bellman, Assistant Commissioner, Financial Regulation, Maryland Department of Labor, 500 N. Calvert Street, Baltimore, MD 21202, or call 410-230-6390, or email to jedd.bellman@maryland.gov, or fax to 410-333-0475. Comments will be accepted through February 3, 2020. A public hearing has not been scheduled.

.04 Consumer Loans.
The term loan account in Financial Institutions Article, §11-219, Annotated Code of Maryland:
  A. Means any loan or advance of money or credit subject to Commercial Law Article, Title 12, Subtitle 3, Annotated Code of Maryland, the Maryland Consumer Loan Law—Credit Provisions, regardless of whether the loan or advance of money or credit is or purports to be made under Commercial Law Article, Title 12, Subtitle 3, Annotated Code of Maryland; and
  B. Does not include an installment loan as defined in Financial Institutions Article, §11-302, Annotated Code of Maryland.

ANTONIO P. SALAZAR
Commissioner of Financial Regulation