N.Y. Personal Property Law § 410: Add-ons to and consolidations of retail instalment contracts and obligations

§ 410. Add-ons to and consolidations of retail instalment contracts

and obligations. 1. A retail instalment contract or obligation which

otherwise conforms to the requirements of this article may contain the

promise or agreement of the buyer to pay in substantially equal periodic

instalments the consolidated total of the principal balance thereof and

the unpaid time balance or balances owing by the buyer under one or more

previous contracts or obligations, together with a credit service

charge; if it does so:

(a) The contract or obligation shall set forth all items required to

be disclosed by the act of congress entitled "Truth in Lending Act" and

the regulations thereunder, as such act and regulations may from time to

time be amended.

(b) Subject to the provisions of section four hundred four and to the

provisions of paragraph (c) of this subdivision, the credit service

charge to be included in such consolidated total may equal but shall not

exceed the larger of the amounts determined by applying the credit

service charge at the rate or rates agreed to by the buyer:

(1) to the total of the principal balance of the subsequent contract

or obligation and the principal balance of any previous contract or

obligation included in the consolidated total determined by deducting

from the then unpaid time balance thereof any then unearned credit

service charge in an amount not less than the refund credit for

anticipation provided for in section four hundred eight (computed,

however, without the allowance of any minimum earned credit service

charge), for the period from the date thereof to and including the date

when the final instalment of such consolidated total is payable; or

(2) to the principal balance of the subsequent contract or obligation

for the period from the date thereof to and including the date when the

final instalment of such consolidated total is payable and, if the due

date of the final instalment of such consolidated total is later than

the due date of the final instalment of any previous contract or

obligation included in the consolidated total, on the time balance then

unpaid on such previous contract or obligation from the date when the

final instalment thereof was payable to the date when the final

instalment of such consolidated total is payable.

(c) A consolidation of a retail instalment contract or obligation

entered into after the effective date of this paragraph with a retail

instalment contract or obligation entered into prior to the effective

date of this paragraph shall be governed by the limitations on maximum

credit service charges contained in subdivision one of this section and

section four hundred four as they were in effect immediately prior to

the effective date of this paragraph.

2. Where a buyer makes any subsequent purchase of goods under a

contract from a seller from whom he had previously purchased goods under

one or more contracts and the amounts due under such previous contract

or contracts have not been fully paid, and where the total of the time

balance of the subsequent contract and the unpaid time balances owing by

the buyer under the previous contracts does not exceed three thousand

dollars, such contract, if it otherwise conforms to the requirements of

this article, may provide that the goods purchased under the previous

contract or contracts shall be security for the goods purchased under

the subsequent contract but only until such time as (a) the purchase

price under the previous contract or contracts is fully paid, or (b)

twenty per centum of the time sale price of the goods purchased under

the subsequent contract has been paid, whichever event first occurs.

3. When such subsequent purchase is made, the entire amount of all

payments made previous thereto shall be deemed to have been applied

toward the payment of the previous purchase or purchases. Each payment

thereafter received shall be deemed to be allocated to all of the

various purchases in the same proportion or ratio as the original cash

sale prices of the various purchases bear to one another; where the

amount of each instalment payment is increased in connection with the

subsequent purchase, the subsequent payments (at the seller's election)

may be deemed to be allocated as follows: an amount equal to the

original rate, to the previous purchase, and an amount equal to the

increase, to the subsequent purchase. However the amount of any initial

or down-payment on the subsequent purchase shall be deemed to be

allocated in its entirety to such purchase. The provisions of

subdivisions two and three of this section shall not apply to cases

involving equipment, parts or other merchandise attached or affixed to

goods previously purchased or repairs or services rendered by the seller

in connection therewith at the buyer's request.