Chapter 04. Retail Installment Sellers

If written notice of intention to repossess was served on the buyer pursuant to Commercial Law Article, §12-624(c), Annotated Code of Maryland, the actual cost of towing or retaking, the exact daily rate of storage, and any other costs relating to retaking and storing which the buyer may be required to pay shall be stated in the notice.

If written notice of intention to repossess was not served on the buyer pursuant to Commercial Law Article, §12-624(c), Annotated Code of Maryland, the notice shall state that:

In addition to the above, all payments by the buyer to redeem any goods repossessed shall be made at a single address of the holder or his designated agent. The exact address, as required by Commercial Law Article, §12-624(d), Annotated Code of Maryland, shall be stated in the written notice. If there is more than one obligor, the required notice shall be sent to all obligors on the contract if the obligors have different addresses.

The Commissioner may hold hearings in accordance with applicable statutory authority in order to determine whether any notice after repossession is in compliance with the law and this regulation.

In all cases of private sale of repossessed goods, a full accounting shall be made to the buyer in writing. The seller shall retain a copy of this accounting for at least 24 months.

The accounting shall contain the following information:

Upon compliance with Commercial Law Article, §12-631, Annotated Code of Maryland, if the Commissioner finds that any sale of repossessed goods was not a bona fide sale, the Commissioner may require the seller to show cause why a determination should not be made that he has not complied with Commercial Law Article, §12-626, Annotated Code of Maryland. If the seller contends that the sale was a bona fide sale in compliance with the statute, he shall have an opportunity to be heard pursuant to the Rules of Procedure of the Commissioner of Financial Regulation. Upon a determination after hearing that the sale was not bona fide, an order disallowing any claim of deficiency liability may be entered.

The Commissioner from time to time may issue reasonable regulations to determine whether the public or private sale is bona fide.

Except as provided elsewhere in this regulation, if an insurance premium is financed as part of an installment sale agreement, whether for dual interest physical damage insurance or third-party liability insurance, or both, and the insurance is terminated for any reason by the insurer and the unearned premium returned to the holder of the installment sale agreement, the holder immediately shall remit the unearned premium to the buyer less only those amounts then due and payable under the contract.

Upon receipt by the holder of the installment sale contract of notice of cancellation of the dual interest coverage, if the holder orders single interest physical damage insurance, the premium for this coverage shall be considered due and payable on the date the coverage is effective. The cost of this single interest coverage may be deducted by the holder from the return premium received by the holder from the insurance company which terminated the dual interest coverage, but only if proper notice is given to the buyer that the unearned premium refund will be so applied and the buyer is given a reasonable opportunity to secure physical damage dual interest coverage from an insurance agent, broker, or company of his choice.

If single interest coverage is procured by the holder, and the buyer later independently procures dual interest coverage, the single interest coverage promptly shall be cancelled by the holder upon proper notice that dual interest coverage is effective. Except as provided below, the return premium refund resulting from cancellation shall be remitted promptly to the buyer less only those amounts then due and payable under the contract.

While the buyer in all cases shall have an absolute right to receive, and the holder to remit, net funds in cash, in which event the buyer shall remain obligated to the holder to repay the same as part of the indebtedness under the contract, the holder may make available to the buyer the following options:

In any case, the holder may elect to remit the unearned premium to the buyer, less any amounts then due and payable, if remittance is made not later than 10 days after the holder's receipt of the unearned premium by check delivered by first class mail to the last known address of the buyer. If the holder makes this election, the holder is not required to offer the buyer any option as described in §D of this regulation, and the full amount of the buyer's indebtedness under the contract, including the amount so remitted, shall remain intact.

Notwithstanding contract conditions to the contrary, notification explaining the above options shall be presented to the buyer in writing not later than 10 days after the holder's receipt of the notice of cancellation, delivered to the buyer's last known address by certified mail, return receipt requested. If the buyer fails to respond to this notice within 15 days from the date of mailing or within 15 days from the date of the holder's receipt of the unearned premium, whichever is later, the holder promptly shall send to the buyer a check for the net amount due and the buyer's indebtedness under the contract, including the amount so remitted, will remain intact. If delivery of this notification or of the check cannot be accomplished by the postal authorities, the holder shall hold the funds for the benefit of the buyer and when the debt is reduced to the point at which the funds held for the benefit of the buyer offset the remaining indebtedness due, the buyer will be notified that the contract has been paid in full.

If, at any time, the buyer defaults in the performance of any requirement under the contract, nothing contained in this regulation shall prohibit the holder from electing to accelerate the entire indebtedness and repossess the collateral, pursuant to the rights granted to the holder by Commercial Law Article, §12-624, Annotated Code of Maryland, and, in this event, the holder has the right to credit against the unpaid balance due under the contract, the return premium funds held for the benefit of the buyer.