N.Y. Personal Property Law § 303: Credit service charge limitation

§ 303. Credit service charge limitation. 1. A retail seller may

contract for in a retail instalment contract and charge, receive and

collect the credit service charge authorized by this article at the rate

or rates agreed to by the retail seller and the buyer.

The credit service charge authorized by this subdivision shall be

computed on an amount equal to the total of the difference between the

cash sale price of the motor vehicle and the amount of the buyer's down

payment and the amount of official fees, and such charge may be made on

the amount included in the contract for insurance as determined under

subdivision six of section three hundred two of this chapter.

2. The credit service charge at the rate or rates authorized in

subdivision one shall be computed on the amounts on which they are

respectively required to be computed as specified in subdivision one on

contracts payable in successive monthly instalments substantially equal

in amount extending for a period of one year. On contracts providing for

instalments extending for a period less than or greater than one year,

the credit service charge shall be computed proportionately.

3. When a retail instalment contract provides for unequal or irregular

instalments, the credit service charge shall be at the effective rates

provided in subdivision one, having due regard for the schedule of

instalments.

4. As an alternative to the credit service charge provided for above,

a retail seller may contract for in a retail instalment contract and

charge, receive and collect a credit service charge calculated on the

unpaid balances of an amount computed as provided in the second

paragraph of subdivision one above, for the time outstanding according

to a generally accepted actuarial method at rates that may vary from

time to time and in accordance with the provisions of the contract. On

any contract with a variable rate credit service charge made pursuant to

this subdivision the rate shall be determined at regular intervals as

set forth in the contract and in accordance with such regulations as the

superintendent of financial services shall prescribe but said rate shall

not vary more often than once in any three month period and shall be

based on a published index that is (a) readily available, (b)

independently verifiable, (c) beyond the control of the retail seller

and (d) approved by the superintendent.

The superintendent shall adopt regulations with respect to retail

installment contracts that provide for a variable rate of credit-service

charge, including but not limited to: (a) providing for disclosure to

the buyer by the retail seller of the circumstances under which the rate

may increase, any limitations on the increase, the effect of an increase

and an example of the payment terms that would result from an increase;

(b) providing for disclosure to the buyer by the retail seller of a

history of the fluctuations of the index over a reasonable period of

time; and (c) providing for notice to the buyer by the retail seller

prior to any rate increase or change in the terms of payment.

5. The credit service charge shall be inclusive of all charges

incident to investigating and making the contract, and for the extension

of the credit provided for in the contract and no fee, expense or other

charge whatsoever shall be taken, received, reserved or contracted for

except as provided in this section, in subdivision seven of section

three hundred two and three hundred six and, if expressly provided for

in the retail instalment contract the amount of official fees as defined

in section three hundred one and the amount, if any, included for

insurance pursuant to subdivision five of section three hundred two.

6. Notwithstanding the maximum credit service charge authorized by

this article, such maximum credit service charge shall not apply to any

retail installment sale insured or guaranteed in whole or in part by the

Federal Housing Administration, the Veterans Administration, or any

other department or agency of the United States government.