Md. Code, Commercial Law § 12-314
This is the official text of Md. Code, Commercial Law § 12-314, part of Maryland’s Code, Commercial Law — governs commercial transactions - Maryland's version of the Uniform Commercial Code.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
§12–314.
Official statutory text
(a) A person may not lend $25,000 or less if:
(1) The person directly or indirectly contracts for, charges, or receives a greater rate of interest, charge, discount, or other consideration than that authorized by the laws of this State;
(2) The transaction violates the federal Military Lending Act; or
(3) The person is not licensed under or exempt from the licensing requirements under the Maryland Consumer Loan Law – Licensing Provisions.
(b) (1) (i) A loan made in the amount of $25,000 or less, regardless of whether the loan is or purports to be made under this subtitle, is void and unenforceable if:
1. Except as provided in subparagraph (ii) of this paragraph, a person contracts for a loan that has a rate of interest, charge, discount, or other consideration greater than that authorized under State law;
2. The loan violates the federal Military Lending Act; or
3. A person who is not licensed under or exempt from the licensing requirements under Title 11, Subtitle 2 of the Financial Institutions Article made the loan.
(ii) A loan is not void and unenforceable if:
1. A clerical error or mistake resulted in the rate of interest, charge, discount, or other consideration being greater than the amount authorized under State law; and
2. A person corrects the error or mistake before the first payment is due under the loan.
(2) A person may not receive or retain any principal, interest, fees, or other compensation with respect to any loan that is void and unenforceable under this subsection.
(3) This subsection does not apply to a person who is exempt from licensing under this subtitle.
(c) (1) This section does not apply to a loan transaction validly made in another state in compliance with a similar loan law of that state.
(2) A lender may not collect an amount that is more than the total amount that would be permitted if this subtitle were applicable.
(3) This section applies to all loans made by a lender domiciled in another state to a borrower who is a resident of this State if the application for the loan originated in this State.
(d) With respect to a loan that is void and unenforceable under this section, a person may not:
(1) Collect or attempt to collect, directly or indirectly, any amount from the borrower;
(2) Enforce or attempt to enforce the contract against any property securing the loan; or
(3) Sell, assign, or otherwise transfer the loan to another person.
(1) The person directly or indirectly contracts for, charges, or receives a greater rate of interest, charge, discount, or other consideration than that authorized by the laws of this State;
(2) The transaction violates the federal Military Lending Act; or
(3) The person is not licensed under or exempt from the licensing requirements under the Maryland Consumer Loan Law – Licensing Provisions.
(b) (1) (i) A loan made in the amount of $25,000 or less, regardless of whether the loan is or purports to be made under this subtitle, is void and unenforceable if:
1. Except as provided in subparagraph (ii) of this paragraph, a person contracts for a loan that has a rate of interest, charge, discount, or other consideration greater than that authorized under State law;
2. The loan violates the federal Military Lending Act; or
3. A person who is not licensed under or exempt from the licensing requirements under Title 11, Subtitle 2 of the Financial Institutions Article made the loan.
(ii) A loan is not void and unenforceable if:
1. A clerical error or mistake resulted in the rate of interest, charge, discount, or other consideration being greater than the amount authorized under State law; and
2. A person corrects the error or mistake before the first payment is due under the loan.
(2) A person may not receive or retain any principal, interest, fees, or other compensation with respect to any loan that is void and unenforceable under this subsection.
(3) This subsection does not apply to a person who is exempt from licensing under this subtitle.
(c) (1) This section does not apply to a loan transaction validly made in another state in compliance with a similar loan law of that state.
(2) A lender may not collect an amount that is more than the total amount that would be permitted if this subtitle were applicable.
(3) This section applies to all loans made by a lender domiciled in another state to a borrower who is a resident of this State if the application for the loan originated in this State.
(d) With respect to a loan that is void and unenforceable under this section, a person may not:
(1) Collect or attempt to collect, directly or indirectly, any amount from the borrower;
(2) Enforce or attempt to enforce the contract against any property securing the loan; or
(3) Sell, assign, or otherwise transfer the loan to another person.
Status: in_force · Read it on the official government site
Dealing with a business matter in Maryland?
See all Maryland Business lawyers
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.