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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0317*
SENATE BILL 317
I2 6lr0858
By: Senators Brooks, Gile, and Simonaire
Introduced and read first time: January 22, 2026
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Credit Regulation – Maximum Interest Rate for Active Service Members 2
(Service Members Civil Relief Act) 3
FOR the purpose of prohibiting a creditor from charging an annual interest rate above a 4
certain level on a certain obligation held by an active service member or jointly by 5
an active service member and the active service member’s spouse; requiring that the 6
active service member or the active service member’s spouse provide the creditor 7
with certain notice and documentation within a certain time; authorizing a court to 8
grant relief from application of this Act after making a certain finding; and generally 9
relating to credit regulation and active service members. 10
BY adding to 11
Article – Commercial Law 12
Section 12–102.1 13
Annotated Code of Maryland 14
(2013 Replacement Volume and 2025 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Commercial Law 17
Section 12–107 18
Annotated Code of Maryland 19
(2013 Replacement Volume and 2025 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – Commercial Law 23
12–102.1. 24
2 SENATE BILL 317
(A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2
(2) “ACTIVE DUTY ” HAS THE MEANING STAT ED IN § 9–901 OF THE 3
STATE GOVERNMENT ARTICLE. 4
(3) “ACTIVE SERVICE MEMBER ” HAS THE MEANING STAT ED IN § 5
9–901 OF THE STATE GOVERNMENT ARTICLE. 6
(4) “OBLIGATION” MEANS A LOAN OR ANY OTHER FINANCING 7
ARRANGEMENT MADE UNDER THIS TITLE. 8
(5) “SERVICE MEMBER” HAS THE MEANING STATED IN § 9–901 OF THE 9
STATE GOVERNMENT ARTICLE. 10
(B) (1) THIS SUBSECTION APPLIES TO AN OBLIGATION HELD JOINTLY BY 11
AN ACTIVE SERVICE MEMBER AND THE ACTIVE SERVICE MEMBER’S SPOUSE. 12
(2) SUBJECT TO SUBSECTION S (E) AND (F) OF THIS SECTION AND 13
NOTWITHSTANDING ANY O THER PROVISION OF TH IS TITLE, A CREDITOR MAY NOT 14
CHARGE INTEREST IN EXCESS OF AN EFFECTIVE RATE OF SIMPLE INTEREST OF 6% 15
PER YEAR ON THE UNPAID PRINCIPAL BALANCE OF AN OBLIGATION HELD BY A N 16
ACTIVE SERVICE MEMBER. 17
(C) IF A SERVICE MEMBER IS ASSIGNED TO ACTIVE DUTY DURING THE TERM 18
OF REPAYMENT FOR AN OBLIGATION, INTEREST IN EXCESS OF 6% PER YEAR ON THE 19
OBLIGATION HELD BY THE SERVICE MEMBER SHALL BE REDUCED IN ACCORDANCE 20
WITH SUBSECTION (B) OF THIS SECTION. 21
(D) ON A REDUCTION OF AN ANNUAL INTEREST RATE UNDER SUBSECTION 22
(C) OF THIS SECTION: 23
(1) INTEREST CHARGES IN EXCESS OF 6% PER YEAR THAT WOULD 24
OTHERWISE BE OWED BUT FOR THE REDUCTION SHALL BE FORGIVEN; AND 25
(2) ANY PERIODIC PAYMENTS DUE DURING THE SERVICE MEMBER’S 26
TERM OF ACTIVE DUTY SHALL BE RECALCULATED AT THE REDUCED ANNUA L 27
INTEREST RATE USING THE SAME REPAY MENT FREQUENCY AND T ERM THAT 28
EXISTED IMMEDIATELY BEFORE THE SERVICE MEMBER ’S ACTIVE–DUTY 29
ASSIGNMENT. 30
(E) TO QUALIFY FOR AN INTEREST RATE REDUCTION UNDER THIS SECTION, 31
THE SERVICE MEMBER OR THE SERVICE MEMBER’S SPOUSE SHALL PROVIDE TO THE 32
SENATE BILL 317 3
CREDITOR NOT LATER THAN 180 DAYS AFTER THE SERVI CE MEMBER IS 1
TERMINATED OR RELEASED FROM ACTIVE DUTY: 2
(1) WRITTEN NOTICE OF THE INTENTION TO HAV E AN OBLIGATION 3
SUBJECT TO THE INTEREST RATE LIMITATION UNDER THIS SECTION; 4
(2) A COPY OF THE MILITARY OR GUBERNATORIAL ORDERS CALLING 5
THE SERVICE MEMBER TO ACTIVE DUTY; AND 6
(3) A COPY OF ANY ORDERS EXTENDING ACTIVE–DUTY SERVICE. 7
(F) IF A COURT FINDS THAT THE ABILITY OF A SERVICE MEMBER OR A 8
SERVICE MEMBER’S SPOUSE TO PAY INTEREST CHAR GES AT A RATE IN EXC ESS OF 9
THE AMOUNT ALLOWED U NDER THIS SECTION IS NOT MATERIALLY AF FECTED BY 10
THE SERVICE MEMBER’S ASSIGNMENT TO ACTIVE DUTY, THE COURT MAY GRANT THE 11
CREDITOR RELIEF FROM THE INTEREST RATE LIMITATION OF THIS SECTION. 12
12–107. 13
If a charge or fee considered interest under this subtitle is charged at or before the 14
inception of a loan contract, the effective rate of simple interest permitted to be charged by 15
§§ 12–102, 12–102.1, and 12–103 of this subtitle, and required to be disclosed by § 12–106 16
of this subtitle shall be determined in the same manner as if the fee or charge had not been 17
charged, except that the principal of the loan used in determining the rate of interest is the 18
face amount of the loan less the fee or charge. 19
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 20
1, 2026. 21