Court of Appeals (Md.) Confirms that Automobile RISC is Not a “Loan” Subject to Usury

Maryland courts have long held that the term “loan” in the Usury Statute does not extend to installment sales contracts for personalty. This is because under Maryland law, a retail installment sale contract, that is, “a bona fide sale of goods on credit at a price which is greater than the cash price by an amount in excess of the legal rate of interest on the cash price is not subject to the usury laws because it is not a loan of money but a sale.” Rothman v. Silver, 245 Md. 292, 299 (1967); see also Financial Credit Corp. v. Williams, 246 Md. 575, 586 (1967); Falcone v. Palmer Ford, Inc., 242 Md. 487, 496 (1966). Appellant argues that subsequent events have undercut the validity of these holdings. . . .However, there is nothing in CL § 12-103(c)(1) that suggests that the statute is intended to apply to anything other than “loans,” as that term is used in the Usury Statute. Moreover, by 1982, the Court of Appeals had made it clear on several occasions that the Usury Statute did not apply to retail installment sales contracts because such contracts were not “loans.” See Rothman, 245 Md. at 299; Finance Credit Corp. v. Williams, 246 Md. at 586; Falcone, 242 Md. at 496.. . .The court was correct when it decided that the allegations in Count 1 of the amended counterclaim did not set out “a claim upon which relief can be granted.” Md. Rule 2-322(b).