Current through 2024-38, September 18, 2024
A. Rules of
Application.
(1) These policies and remedies
represent the standards to be used by the Bureau in enforcing the Code. The
Bureau retains the authority to take appropriate alternative action pursuant to
Article VI of the Code.
(2) Credit
transactions
(a) Except as specifically noted
below, these guidelines apply to all consumer credit transactions within the
jurisdiction of the Code.
(b) The
guidelines do not apply to the following:
(i)
advertising (Section 3-201); and
(ii) licensing of supervised lenders, Article
II, Part 3.
B. Violations Subject to Corrective Action.
Violations subject to corrective action include the following:
(1) Violations involving the failure to
correctly disclose required information, which may or may not involve
overcharges;
(2) Violations
involving overcharges, except that violations involving overcharges of less
than $1.00 per individual account will not be subject to reimbursement unless
the Bureau determines they are part of a consistent pattern, or due to gross
negligence or a willful violation of the Code;
(3) Violations involving practices of the
creditor prohibited by the Code; and
(4) Violations involving the use of
agreements prohibited by the Code.
C. Period for which Corrective Action
Required. Except as otherwise provided in this Rule, corrective action shall be
required on all consumer credit transactions within the scope of the Code and
to which the record retention provisions of Regulation Z-2 and § 1-111
apply. In other words, corrective action may be required for Truth-in-Lending
violations for a period of two years following the date disclosure was required
to be given, and for Articles I through VI violations, for a period of two
years after final entry on the account for closed-end transactions and two
years after the most recent entry on the account for open-end
transactions.
D. Disclosure of
Reason(s) for Corective Action. Whenever corrective action is taken, the
creditor must clearly inform the consumer that the action is being taken
because of the creditor's failure to comply with the Maine Consumer Credit
Code. The notice will further inform the consumer of the specific violation
and, in the case of corrective action involving reimbursement of any kind,
clearly inform the consumer of his unqualified right to keep such
reimbursement.
E. Procedures for
Corrective Action.
(1) Within 60 days of
receipt by the creditor from the Administrator of the written notice of one or
more alleged violations, the creditor shall:
(a) submit further information or documents
relevant to a report of examination or notice of alleged violation which
demonstrate to the Administrator that a violation has not occurred;
(b) by written notice to the Administrator,
contest the written notice of alleged violations pursuant to subsection F;
or
(c) proceed under subsection
(E)(2) of this Section.
(2) With respect to a notice of alleged
violation not contested by the creditor, the creditor shall, within 60 days of
receipt, take the appropriate corrective action required by Section
5 of this Rule. Extension of this time
period may be granted by the Administrator for good cause, but such extension
shall not affect § 5-201(7) or § 8-208(2). Failure to comply with
this paragraph shall automatically result in notification by the Bureau of the
alleged violations to all parties to the transactions pursuant to subsection
G.
F. Contested
Findings.
(1) The administrator shall attempt
to resolve disputes first by informal means, including the negotiation of an
Assurance of Discontinuance (§ 6-109).
(2) Failure to resolve the disputed findings
of violation by informal means may result in the use by the Administrator or
recommendation to the Attorney General of one or more formal enforcement
options set forth in the Code: administrative enforcement orders (§ 6-108
); injunction against violations (§ 6-110); injunction against
unconscionable agreements or conduct (§ 6-111); civil actions to seek
damages, refunds or penalties in appropriate cases (§ 6-113); temporary
injunctions (§ 6-112); or criminal penalties (§§ 5-301, 8-109
).
G. Notification of
Consumer. Pursuant to § 6 -106(1), the Administrator shall notify all
parties to a consumer credit transaction that an alleged violation has occurred
and their legal options regarding that violation if:
(1) The creditor contests the notice of
alleged violation, in which case the notice will also inform consumers that the
creditor disputes the alleged violation;
(2) The creditor does not contest the notice
of alleged violation but fails to take the appropriate corrective action within
the time period specified in subsection E(2); or
(3) The alleged violation is determined to be
an obvious error under subsection H and is not subject to administrative
corrective action involving overcharges under §
5(C). The
Administrator may permit notice from the creditor that may be required under
§
5(B) to suffice for
any notice that would otherwise be sent by the Administrator, provided that the
Administrator has the opportunity to review the creditor's notice, and modify
it if necessary, before it is sent.
H. Obvious Error.
(1) An "obvious error" is one in which the
APR was disclosed correctly, but the finance charge required to be disclosed
was understated, or the finance charge was disclosed correctly but the APR
required to be disclosed was understated, and the error involved a disclosure
which was 10% or less of the amount that should have been disclosed.
(2) Except for the provisions of §
5(A)
and (B), an obvious error will not be subject
to administrative remedy unless the Administrator finds that the error resulted
from gross negligence or a willful intent to deceive the consumer.
I. Agency Discretion. Corrective
action will not be required if the Administrator determines that the violation
resulted from any unique circumstances involving a clearly technical and
non-substantive violation and which, in the case of disclosure, did not
adversely affect the information provided to the consumer and did not mislead
or otherwise deceive the consumer.
