2012 New York Consolidated Laws
PEP - Personal Property
Article 10 - (401 - 422) RETAIL INSTALMENT SALES ACT
404 - Credit service charge limitation.

 
    §  404. Credit service charge limitation. 1. A seller may, in a retail
  instalment contract or obligation, contract for and,  if  so  contracted
  for, the holder thereof may charge, receive and collect a credit service
  charge  computed  on the principal balance of the contract or obligation
  from the  date  thereof  to  and  including  the  date  when  the  final
  instalment is payable, at the rate or rates agreed to by the buyer.
    2.  Except  as  provided  in  subdivision  three of this section, such
  credit service charge shall be computed  on  the  principal  balance  on
  contracts  or  obligations  payable  in  successive  monthly instalments
  substantially equal in amount for a period of one year. On contracts  or
  obligations  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  or  obligation provides for
  unequal or irregular instalments, the credit service charge shall be  at
  the  effective  rate  provided  for  in subdivision one of this section,
  having due regard for the schedule of instalments.
    4. As an alternative to the credit service charge provided for  above,
  a  seller  may,  in a retail instalment contract or obligation, contract
  for and, if so contracted  for,  the  holder  may  charge,  receive  and
  collect  a  credit  service  charge  calculated  on the unpaid principal
  balances of the contract for the time each is 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  or
  obligation.  On  any  contract or obligation with a variable rate credit
  service charge made pursuant to this subdivision,  each  rate  shall  be
  determined  at  regular  intervals  as  set  forth  in  the  contract or
  obligation 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 holder, and (d) approved by
  the superintendent.
    The superintendent of financial services shall adopt regulations  with
  respect  to retail installment contracts or obligations that provide for
  a variable rate of credit service charge, including but not limited  to:
  (a)  providing  for  disclosure  to  the  buyer  by  the  holder  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 holder of a history of the fluctuations of the index over a
  reasonable  period  of  time;  and (c) providing for notice to the buyer
  from the holder 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 or obligation, and for
  the extension of the credit provided for in the contract or  obligation,
  and no fee, expense or other charge whatsoever shall be taken, received,
  reserved or contracted for except as otherwise provided in this article.