N.Y. PEP Law § 303 — New York Code / Act PEP / Article 9 / Section 303
Credit service charge limitation
Status: in_force

§ 303. Credit service charge limitation. 1. A retail seller may\ncontract for in a retail instalment contract and charge, receive and\ncollect the credit service charge authorized by this article at the rate\nor rates agreed to by the retail seller and the buyer.\n  The credit service charge authorized by this subdivision shall be\ncomputed on an amount equal to the total of the difference between the\ncash sale price of the motor vehicle and the amount of the buyer's down\npayment and the amount of official fees, and such charge may be made on\nthe amount included in the contract for insurance as determined under\nsubdivision six of section three hundred two of this chapter.\n  2. The credit service charge at the rate or rates authorized in\nsubdivision one shall be computed on the amounts on which they are\nrespectively required to be computed as specified in subdivision one on\ncontracts payable in successive monthly instalments substantially equal\nin amount extending for a period of one year. On contracts providing for\ninstalments extending for a period less than or greater than one year,\nthe credit service charge shall be computed proportionately.\n  3. When a retail instalment contract provides for unequal or irregular\ninstalments, the credit service charge shall be at the effective rates\nprovided in subdivision one, having due regard for the schedule of\ninstalments.\n  4. As an alternative to the credit service charge provided for above,\na retail seller may contract for in a retail instalment contract and\ncharge, receive and collect a credit service charge calculated on the\nunpaid balances of an amount computed as provided in the second\nparagraph of subdivision one above, for the time outstanding according\nto a generally accepted actuarial method at rates that may vary from\ntime to time and in accordance with the provisions of the contract. On\nany contract with a variable rate credit service charge made pursuant to\nthis subdivision the rate shall be determined at regular intervals as\nset forth in the contract and in accordance with such regulations as the\nsuperintendent of financial services shall prescribe but said rate shall\nnot vary more often than once in any three month period and shall be\nbased on a published index that is (a) readily available, (b)\nindependently verifiable, (c) beyond the control of the retail seller\nand (d) approved by the superintendent.\n  The superintendent shall adopt regulations with respect to retail\ninstallment contracts that provide for a variable rate of credit-service\ncharge, including but not limited to: (a) providing for disclosure to\nthe buyer by the retail seller of the circumstances under which the rate\nmay increase, any limitations on the increase, the effect of an increase\nand an example of the payment terms that would result from an increase;\n(b) providing for disclosure to the buyer by the retail seller of a\nhistory of the fluctuations of the index over a reasonable period of\ntime; and (c) providing for notice to the buyer by the retail seller\nprior to any rate increase or change in the terms of payment.\n  5. The credit service charge shall be inclusive of all charges\nincident to investigating and making the contract, and for the extension\nof the credit provided for in the contract and no fee, expense or other\ncharge whatsoever shall be taken, received, reserved or contracted for\nexcept as provided in this section, in subdivision seven of section\nthree hundred two and three hundred six and, if expressly provided for\nin the retail instalment contract the amount of official fees as defined\nin section three hundred one and the amount, if any, included for\ninsurance pursuant to subdivision five of section three hundred two.\n  6. Notwithstanding the maximum credit service charge authorized by\nthis article, such maximum credit service charge shall not apply to any\nretail installment sale insured or guaranteed in whole or in part by the\nFederal Housing Administration, the Veterans Administration, or any\nother department or agency of the United States government.\n