N.Y. Personal Property Law 413 – Retail instalment credit agreements
Terms Used In N.Y. Personal Property Law 413
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fraud: Intentional deception resulting in injury to another.
- Grace period: The number of days you'll have to pay your bill for purchases in full without triggering a finance charge. Source: Federal Reserve
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Personal property: All property that is not real property.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Tort: A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
- Usury: Charging an illegally high interest rate on a loan. Source: OCC
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
The superintendent of financial services shall adopt regulations with respect to credit agreements that provide for a variable rate of service charge, including but not limited to: (a) providing for disclosure to the buyer by the 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 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 seller prior to any rate increase or change in the terms of payment. The regulations shall allow a seller, holder or financing agency after choosing an approved index to choose a spread and a minimum and maximum rate of service charge at its discretion. A retail instalment credit agreement, whether it provides for a fixed or variable service charge, may provide for an introductory rate of service charge at either a fixed or variable rate, provided that the terms of such introductory rate, including, if applicable, the date on which the introductory rate shall terminate, are disclosed to the buyer. Such disclosure shall be contained on an application form or pre-approved written solicitation as specified pursuant to subdivisions one and one-a of section five hundred twenty of the general business law. A change in the service charge rate upon expiration of an introductory rate shall not be considered a variable rate or a change in terms. The service charge rate in effect after expiration of an introductory rate may apply to all amounts due under the credit agreement regardless of when incurred, and disclosure of the same shall be provided to the buyer in the written agreement.
Any service charge, whether assessed by a fixed or variable rate, may be reduced on such terms as the seller may determine, provided that the terms of such reduction, including, if applicable, the date on which the reduction will terminate, are disclosed to the buyer on the written notice announcing the reduction, prior to the effective date of the reduction. A new method of determining a service charge is a reduction in the service charge if the charge determined under the new method never exceeds the charge under the original method. The original service charge or original method of determining the service charge may be applied after the reduction ends to the entire outstanding indebtedness, including any indebtedness incurred when the reduced service charge applied, and disclosure of the same shall be provided to the buyer in the written notice announcing the reduction. A reduction to a service charge, including the resumption of the original service charge or the original method of determining the service charge, shall not be considered a change in terms for purposes of this paragraph.
Sections usury in the second degree” class=”unlinked-ref” datatype=”S” sessionyear=”2019″ statecd=”NY” title=”penal”>190.40 and 190.42 of the penal law shall not apply to fees and charges set forth in this subdivision. For purposes of 12 U.S.C. §§ 85, 1831 d, 1463(g) and 1785 (g), the fees and charges permitted under this subdivision are interest under New York law, and all terms, conditions, and other provisions of a retail instalment credit agreement, including without limitation, fees and charges, provisions relating to the method of determining the outstanding indebtedness on which a service charge is imposed and circumstances in which a service charge may be avoided, are material to the determination of the interest rate under New York law.
Nothing in this subdivision contained shall be construed to affect the validity or invalidity of any agreement or alleged agreement made prior to October first, nineteen hundred fifty-seven.
Any such prohibited provision shall be void but shall not otherwise affect the validity of the contract.
A financing agency which purchases from more than one seller or municipal corporation or which purchases from the New York city water board indebtedness of a retail buyer to be paid in accordance with such a retail instalment credit agreement entered into by the financing agency with the buyer as provided in this subdivision may charge, receive and collect the service charge authorized by subdivision three of this section only if the service charge so authorized is computed on the buyer’s total outstanding indebtedness to the financing agency from month to month to be paid in accordance with such a retail instalment credit agreement.