NY Banking L § 108 (2021)
2021 New York Laws BNK - Banking Article 3 - Banks and Trust Companies 108 - Rates of Interest; Installment Obligations; Personal Loan Departments.

§ 108.  Rates  of  interest;  installment  obligations;  personal loan departments. 1. Except as otherwise provided in this section, no bank or trust company shall take, receive, reserve or  charge  on  any  loan  or discount  made,  or upon any note, bill of exchange or other evidence of debt, negotiable or otherwise, interest, as computed  pursuant  to  this subdivision,  at  a  rate  greater  than  the  rate  prescribed  by  the superintendent of financial services pursuant to section  fourteen-a  of this  chapter, or, if no rate has been so prescribed, six per centum per annum, or two dollars if the interest so  computed  is  less  than  that amount.  Such  interest  may be taken in advance, reckoning the days for which the note, bill or evidence of debt has to run. If interest  is  so taken  in  advance  and  the  maturity  of  the  debt is accelerated and judgment is obtained, or the debt is otherwise paid prior to its  normal date  of maturity, the bank or trust company shall refund to the obligor or his legal representative, as the case may be, the  unearned  interest previously  deducted  and the unused portion of any premiums charged for insuring the obligor under a group credit insurance policy, such  refund to  be  calculated  in accordance with the method described in paragraph (e) of subdivision four of this section. A reasonable charge by  a  bank or  trust  company  for  the collection of a bona fide bill of exchange, note or other evidence of debt payable at a place other than  the  place where  purchased, discounted or sold, in addition to the interest, shall not be considered interest for the purpose of  any  law  regulating  the maximum rate of interest which may be charged, taken or received.   Anything    contained    in   this   subdivision   to   the   contrary notwithstanding, the charging of interest  or  discount  on  a  loan  or discount  made  outside  this state at a rate allowed by the laws of the jurisdiction where such loan is made, or the acquisition by  a  bank  or trust  company  of a part interest or the entire interest in any loan or discount heretofore or hereafter made by a bank or trust company or  any other banking institution, shall not be a violation of this section.   2.  Any  bank  or trust company may purchase or otherwise acquire from the payee, owner or holder thereof any obligation in writing to  pay  in installments  all  or  part of the price of personal property or that of the performance of services, whether that  obligation  be  a  negotiable promissory  note  or other evidence of debt, or any accounts receivable, whether or not they are obligations in writing, or any lease of personal property, and may lease personal property acquired by it, doing  so  for such  price  or  rentals or other consideration and upon such additional terms and conditions as may be mutually agreeable.   3. Upon advances of money, repayable on demand, to an amount not  less than  five thousand dollars, made upon documents of title within article seven of the uniform commercial code or  negotiable  instruments  within article three or article eight of the uniform commercial code pledged as collateral  security  for  such repayment, any bank or trust company may receive or contract to receive and collect as  compensation  for  making such  advances  any  sum which may be agreed upon by the parties to such transaction.   4. (a) A bank or trust company may operate a personal loan  department at  all  or  at  any one or more of its authorized places of business in accordance with the requirements of this  subdivision.  The  records  of such  department  shall  be  kept in such form as the superintendent may from time to time prescribe. The superintendent may, after giving notice of the contemplated action and reasonable opportunity to be heard, order that the operation of such department be discontinued if he  shall  find that  the bank or trust company has failed to conform to any requirement of this subdivision. The superintendent may forthwith, and for a  period not  to exceed thirty days pending further investigation, order that the  operation of any such department be temporarily discontinued if he shall have  reasonable  cause  to  believe  that  the  requirements  of   this subdivision  are  not having compliance. Such order of discontinuance or temporary  discontinuance  may  apply  to  one or more of the authorized places of business of a bank or trust company.  The  superintendent  may terminate  or  modify  such  orders  if  he shall be satisfied that such department will be operated in accordance with the requirements of  this subdivision.   No   order   of  discontinuance  or  temporary  order  of discontinuance shall impair or affect the obligation of any  preexisting lawful loan or advance from a bank or trust company to any borrower.  (b)  A bank or trust company which operates a personal loan department may make loans and charge interest thereon, which may be  calculated  on the  actual  unpaid  principal  balances of the loan or in the case of a loan commitment from the date of each advance thereunder for the  actual time  outstanding, according to a generally accepted actuarial method at a fixed or variable rate  in  accordance  with  the  provisions  of  the evidence  of  the  indebtedness,  or taken in advance, computed from the date of the loan, or in the case of a loan commitment from the  date  of each  advance  thereunder,  to  the date of the last installment payable thereunder, at the rate or rates agreed to by the bank or trust  company and the borrower, with respect to any loan which is repayable at regular periodic  intervals  of  not  more than one month over a period from the date of the loan not exceeding (i)  thirty-seven  months,  if  the  face amount  of the loan is for not more than twelve hundred dollars, or (ii) any number of months agreed to by the bank  or  trust  company  and  the borrower,  (A)  if  the  face amount of the loan is for more than twelve hundred dollars, (B) if  the  loan  is  for  more  than  twelve  hundred dollars,  and is made for a commercial or business use or purpose or for investment in or purchase of an unincorporated  business  or  commercial enterprise,  (C)  if the loan or loan commitment is made for educational purposes as specified in subdivision five-b of this section, or  (D)  if the  loan  or  advance  of  credit  is made for the purpose of financing alterations, repairs and improvements upon or in connection with, or  as the  superintendent  may authorize the equipping of existing structures, and the building of new structures, upon urban, suburban, or rural  real property  (including  the  restoration,  rehabilitation,  rebuilding and replacement of such improvements which have been damaged or destroyed by earthquake, conflagration, tornado, hurricane, cyclone, flood  or  other catastrophe),  by the owners thereof or by lessees of such real property under a lease expiring not less than six months after  the  maturity  of the  loan  or  advance  of credit or by lessees under proprietary leases from  corporations  or  partnerships  formed  for  the  purpose  of  the cooperative  ownership  of  real  estate.  The  total  unpaid  principal balances of any one or more loans made by such bank or trust company  to the  borrower  pursuant  to  this  subdivision  shall  be  determined by agreement between such bank or trust company and the  borrower.  If  the loan  is made for a period of one year or more, provision may be made in the note, instrument or other evidence of  debt,  for  the  omission  of payments  during  not  more  than  any  three  specified  months  in any twelve-month period, but the  maximum  period  of  thirty-seven  months, shall not be exceeded. On any loan with a variable rate of interest made pursuant  to  this  paragraph,  the  rate shall be determined at regular intervals as set forth in the evidence of indebtedness 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 bank or trust company and (d) approved by the superintendent.    The superintendent of  financial  services  shall  adopt  regulations, including  but  not  limited  to:  (a)  providing  for disclosure to the borrower by the bank or trust company 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 borrower by  the  bank  or trust  company  of  a  history  of  the fluctuations of the index over a reasonable period of time; and (c) providing for notice to the  borrower from  the  bank or trust company prior to any rate increase or change in the terms of payment.  (c) The rate of interest  authorized  by  this  subdivision  shall  be inclusive  of all charges incident to investigating and making any loan. No fee, commission, expense, or  other  charge  whatsoever  in  addition thereto  shall  be  taken, received, reserved, or contracted for, except (i) the fees payable to the appropriate public officer  to  perfect  any lien or other security interest taken to secure the loan or the premium, not  in  excess of such filing fee, payable for any insurance in lieu of such filing; (ii) in  case  of  default,  and  in  accordance  with  the provisions of the instrument evidencing the obligation, either a fine in an  amount  not to exceed five cents per dollar on any installment which has become due and remained unpaid for a period in excess of  ten  days, but  no  such  fine shall exceed five dollars and only one fine shall be collected on any such installment regardless of the period during  which it remains in default, and provided further that should the aggregate of such  fines  collected in connection with any loan exceed two per centum of such loan, or in any event twenty-five dollars,  the  bank  or  trust company shall refund such excess to the borrower within sixty days after the  loan  is  paid  in  full,  or,  subject to an allowance of unearned interest attributable to the amount in default, interest on each  amount past  due  at  a  rate  not  in  excess  of the rate provided for in the instrument evidencing the obligation;  (iii)  the  actual  expenditures, including  reasonable  attorney's  fees for necessary court process; and (iv) in case the bank or trust company insures a borrower under a credit unemployment insurance policy, group life insurance policy, group health insurance policy, group accident insurance policy, or group  health  and accident  insurance  policy,  or requires insurance on personal property securing any such  loan,  an  amount  not  in  excess  of  the  premiums chargeable  in accordance with rate schedules then in effect and on file with the superintendent of financial services for such insurance by  the insurer.  No bank or trust company shall require a borrower to place any sum on deposit,  or  to  make  deposits  in  lieu  of  regular  periodic installment payments, or to do or refrain from doing any other act which would  entail  additional expense or sacrifice, as a condition precedent to granting a loan under the authority of  this  subdivision  except  as provided  in  subdivision  five-b  of  this section. Notwithstanding the foregoing, a bank or trust company may, with the prior approval  of  the superintendent, offer a loan product that encourages personal savings by requiring  a  borrower  to  place a portion of the principal of the loan into an interest-bearing savings account as  a  condition  precedent  to granting  a  loan  under  the authority of this subdivision. In deciding whether to approve a loan product pursuant to  the  preceding  sentence, the  superintendent  may  consider the recent results of examinations of the bank  or  trust  company,  the  terms  and  structure  of,  and  the underwriting  criteria and marketing plan for the proposed loan product, other loans offered by the bank or trust company, and such other factors the superintendent deems to be relevant. Notwithstanding the  provisions of  this  paragraph  no  refund  of excess fines shall be required if it amounts to less than one dollar.  (d) In each note, instrument or other evidence  of  debt  given  by  a borrower  to  evidence a loan under this subdivision, where such loan is not subject to the provisions of 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,  the rate of charge (stating any minimum as permitted by  this  subdivision  four),  shall  be  expressed either  in accordance with the method prescribed by such act of congress or: (i) as a rate in dollars per annum discount per one hundred  dollars face  amount of loan, or (ii) as the rate or rates agreed to by the bank or trust company and the borrower.  (e) A borrower may prepay the loan in full or, with the consent of the bank or trust company, may  refinance  the  loan.  If  the  interest  is calculated   on   the  actuarial  basis,  or  if  the  evidence  of  the indebtedness provides that the rate of interest may vary  from  time  to time,  a  borrower  may  prepay the loan in full without penalty. If the interest was taken in advance,  in  the  event  of  such  prepayment  or refinancing,  the  bank  or trust company shall refund: (1) the unearned portion of the interest to the borrower  the  amount  of  which  portion shall  be determined according to a generally accepted actuarial method; provided, however, that if the amount of  interest  previously  deducted (i)  was  less  than  ten  dollars, no refund shall be required; or (ii) exceeded the sum of ten dollars and the earned  interest  is  less  than that  amount,  the  bank  or trust company may retain such an additional amount as will bring the earned interest to the sum of ten  dollars  and refund  the  remainder,  and  provided  further, that unless the loan is refinanced, no refund shall be required if it amounts to less  than  one dollar;  and  (2)  if a charge was made to the borrower for premiums for insuring the borrower under  a  credit  unemployment  insurance  policy, group  life insurance policy, or under a group health, group accident or group health and accident insurance policy, the excess of the charge  to the  borrower  therefor over the premiums paid or payable by the bank or trust company, if such premiums were paid or  payable  by  the  bank  or trust  company  periodically,  or  the refund for such insurance premium received or receivable by the bank or trust company, if such premium was paid or payable in a lump sum by the bank  or  trust  company,  provided that  no  such  refund  shall be required if it amounts to less than one dollar. In the event (i) the maturity of the loan is accelerated due  to the  default  of  the borrower or otherwise and judgment is obtained, or (ii) repayment is made  pursuant  to  any  such  insurance  policy,  the borrower  or  his  legal  representative,  as  the case may be, shall be entitled to the same refund as if the loan had been prepaid in  full  on the date of acceleration or repayment.  (f)  A  bank  or  trust company may, upon agreement with the borrower, extend the scheduled due date or defer the scheduled payment of  all  or any  part of any installment or installments payable under the loan. The agreement for such extension or deferment must be in writing and  signed by  the  borrower. The bank or trust company may charge and contract for the payment of an extension or  deferral  charge  by  the  borrower  and collect and receive the same, at the rate or rates agreed to by the bank or  trust  company and the borrower, on the amount of the installment or installments, or part thereof, extended or deferred for  the  period  of extension  or deferral. Such period shall not exceed the period from the date when such extended or deferred installment or installments, or part thereof, would have been payable in the absence  of  such  extension  or deferral,  to  the  date  when such installment or installments, or part thereof, are made payable under the agreement of extension or deferment; except that a minimum charge of one dollar for the period  of  extension or  deferral  may  be  made  in any case where the extension or deferral  charge, when computed at such rate, amounts to  less  than  one  dollar. Such  agreement  may also provide for the payment by the borrower of the additional cost to the bank or trust company of premiums for  continuing in  force,  until  the  end of such period of extension or deferral, any insurance coverages provided in connection with the loan subject to  the other provisions of this subdivision.  (g)  If  the  borrower  is  obligated  in  connection with the loan to maintain  insurance  on  a  motor  vehicle  securing  the  loan  and  if subsequent  to the making of the loan the borrower fails to maintain the insurance, the bank or trust company may make advances  to  procure  the equivalent  limits of insurance for either the interests of the borrower and the bank or trust company or of either of them, and  any  amount  so advanced  may be the subject of an interest charge from the date of such advance as though such amount was part of the unpaid  principal  balance of  the loan.   Each amount so advanced shall be secured by the personal property if so provided in the security agreement covering the  personal property  and  if  the  bank  or  trust company notifies the borrower in writing of the advance of such amount and of his or her option to  repay such amount in any one of the following ways:  (1)  Full  payment  within ten days from the date of giving or mailing the notice;  (2) Full  amortization  during  the  term  of  the  insurance  or  the remaining term of the loan, at the option of the bank or trust company;  (3)  If  offered  by  the  bank  or  trust company, as a final balloon payment payable one month after the last scheduled payment in connection with the loan;  (4) If offered by the bank or trust company, full  amortization  after the  term  of the loan, to be payable in instalments which do not exceed the average instalment payable in connection with the loan; or  (5) If offered by the bank or trust company,  any  other  amortization plan.   If  the  borrower  neither  pays  in  full  the amount so advanced nor notifies the bank or trust company in  writing  of  his  or  her  choice regarding  amortization  options  before the expiration of ten days from the date of giving or mailing  of  the  notice  by  the  bank  or  trust company, the bank or trust company shall amortize the amount so advanced pursuant to subparagraph two of this paragraph.   5.  (a)  A  bank  or  trust  company  which  operates  a personal loan department pursuant to paragraph (a)  of  subdivision  four  hereof  may establish  credits  under written agreements with borrowers, pursuant to which one or more loans or advances to or for the account of a  borrower may  be  made from time to time, by means of honoring one or more checks or other written, electronic or telephonic orders  or  requests  of  the borrower  and may charge interest on such loans and advances at the rate permitted by paragraph (b) of this subdivision, provided such loans  and advances   comply   with   the  provisions  of  this  subdivision.  This subdivision does not authorize any bank or trust  company  to  make  any loan  or  advance  in  connection with the purchase or lease of goods or services by means of a credit card as defined in  section  five  hundred eleven  of  the  general  business  law,  except  for  a loan or advance resulting from the use of a card which may be used to access  a  deposit account  and line of credit associated with that account. The records of such loans and advances shall be kept in such form as the superintendent may from time to time prescribe.  (b) Such agreement may provide for interest on  the  unpaid  aggregate principal   amount  of  such  loans  and  advances  from  time  to  time outstanding at the rate or rates agreed to by the bank or trust  company and  the  borrower,  as computed pursuant to this section, including, in  accordance with the provisions of the agreement,  rates  that  may  vary from  time  to  time  reckoned  on  each  loan  or advance from the date thereof, calculated on any of the following bases:  (i)  on  the  unpaid principal   amount  of  such  loans  and  advances  from  time  to  time outstanding, or (ii) for each month on an  average  balance  outstanding determined  by  dividing  by  two  the  sum  of  the  balances of unpaid principal of such loans and advances outstanding  on  two  dates  during such  month,  as  specified  in such agreement; the first of which dates being not later than the fifteenth day of  such  month  and  the  second being not earlier than the sixteenth day of such month and not less than ten  nor  more  than twenty days after the first date, or (iii) for each month on a fixed amount selected from a schedule, which fixed amount may exceed the average daily balance under (i) above, or the average balance if determined under (ii) above, by a differential of not more than  five dollars,  provided  the  same  fixed  amount  is also used for computing interest for any month for which such balance exceeds said fixed  amount by any amount up to at least the same differential. For purposes of this subdivision, a month may but need not be a calendar month, and a bank or trust  company  computing  interest on a daily basis may charge for each day one thirtieth of the monthly interest  rate.  No  amendment  to  any agreement  shall  take  effect  unless  at  least  30  days prior to the effective date of such amendment,  imposition  or  increase,  a  written notice  has  been  mailed  or delivered to the borrower that clearly and conspicuously describes such amendment, imposition or increase  and  the indebtedness  to which it applies and if the amendment has the effect of increasing the rate of interest, either (a) the notice states  that  the incurrence  by  the  borrower or another person authorized by him of any further indebtedness under the plan to which the agreement relates on or after the effective date of such change specified in  the  notice  shall constitute  acceptance of such change, and either the borrower agrees in writing to such change or the borrower or another person  authorized  by him  incurs  such further indebtedness on or after the effective date of the change stated in the notice, or (b) the notice advises the  borrower that  he  has thirty days from the earlier of the mailing or delivery of the notice to advise the bank or trust company in writing that  he  does not accept such amendment, provided that such notice contains an address to  which the borrower may send notice of his election not to accept the amendment and also provided that the notice specifies that the amendment will take effect absent receipt of the borrower's written  objection  to the amendment. Any borrower who has received a notice pursuant to clause (a)  who  does  not  agree  in  writing  to the amendment and no further indebtedness is incurred under the plan to which the agreement  relates, and  any  borrower  who  gives  a timely notice, pursuant to clause (b), electing not to accept the amendment  shall  be  permitted  to  pay  his outstanding  indebtedness  in accordance with the terms of the agreement but the bank or  trust  company  may  terminate  the  amount  of  credit available  to  the  borrower  and may require the borrower to return all credit cards and checks issued in connection with the agreement. If such a borrower subsequently obtains credit under  the  agreement,  such  use shall  constitute  acceptance of the change of terms and shall be deemed to have been accepted and shall become effective as to the  borrower  as of  the  date such change would have become effective but for the giving of notice by the borrower. If notice is given pursuant to clause (b) and the borrower does not timely object in writing to  the  amendment,  such amendment  shall  become  effective  without  action  on the part of the borrower; provided that in no event shall any such amendment or increase take effect with respect to (i) the unpaid aggregate principal amount of loans or advances representing indebtedness outstanding prior to January  1, 1981 and (ii) the unpaid  aggregate  principal  amount  of  loans  or advances  representing  indebtedness  incurred,  under or pursuant to an agreement in effect on December 1, 1980, between January  1,  1981,  and the  effective date of such amendment or increase specified in the first notice  mailed  or  delivered  pursuant  to  clause  (a).   Indebtedness outstanding  prior  to  January 1, 1981, for purpose of clause (i) above and indebtedness outstanding prior to the effective date of an  increase for  purposes  of  clause (ii) above shall be determined on the basis of crediting payments and other credits first to that portion of  any  such indebtedness  representing interest charges, insurance premiums, service charges and fines and then to that portion  representing  the  principal amount  of  loans or advances in the order in which made. The provisions of this paragraph permitting an increase in a rate of interest shall not apply in the case of an agreement which expressly prohibits changing  of interest  rates  or  which  provides limitations on changing of interest rates  which  are  more  restrictive  than  the  requirements  of   this paragraph.  An  amendment  to an agreement deleting a provision that the rate of interest may vary from time to time  may  not  become  effective within one year from the later of the effective date of the agreement or the  effective  date  of  an amendment to an agreement adding a variable rate provision. On any loans or advances with rates of interest that may vary from time to time made pursuant to this  paragraph,  such  variable rates  of interest shall be determined at regular intervals as set forth in the  agreement  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 bank or trust company and (d) approved by the superintendent, (e) such loan rate shall be based on the index  values,  or  the  index  numbers  plus  or  minus additional  percentage  points provided, however, that variations in the rate must correspond directly to the movements of the index values  plus or   minus   additional  percentage  points  only.  Once  such  rate  is established no lending institution may add any factors to  increase  the rate  other  than  variations in the established index without the prior approval of the superintendent of financial services.  For  purposes  of this  paragraph,  an adjustment in the rate of interest as a consequence of movement in the selected index shall not constitute an  amendment  to that  agreement. A reduction in the grace period for the assessment of a fee on any installment  not  paid  when  due,  shall  be  considered  an amendment to an agreement as set forth in this paragraph.   The  superintendent of financial services shall adopt regulations with respect to agreements that provide for  a  variable  rate  of  interest, including  but  not  limited  to:  (a)  providing  for disclosure to the borrower by the bank or trust company 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 borrower by  the  bank  or trust  company  of  a  history  of  the fluctuations of the index over a reasonable period of time; and (c) providing for notice to the  borrower from  the  bank or trust company prior to any rate increase or change in the terms of payment. The  regulations  shall  allow  a  bank  or  trust company  after  choosing  an  approved  index  to  choose a spread and a minimum and maximum rate of interest at its discretion.   A written agreement, whether it  provides  for  a  fixed  or  variable interest  rate,  may  provide  for  an  introductory rate of interest at either a fixed or a 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  borrower.  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 interest rate upon expiration of an introductory rate shall  not  be considered  a  variable  rate or a change in terms. The interest rate in effect after expiration of an introductory rate may apply to all amounts due under the agreement regardless of when incurred  and  disclosure  of the same shall be provided to the borrower in the written agreement.   Any interest charge, whether assessed by a fixed or variable rate, may be  reduced  on  such  terms as the bank or trust company may determine, provided that the terms of such reduction, including, if applicable, the date on which  the  reduction  will  terminate,  are  disclosed  to  the borrower  on  the  written notice announcing the reduction, prior to the effective date of the reduction. A new method of determining an interest charge is a reduction in the interest charge if  the  charge  determined under the new method never exceeds the charge under the original method. The  original  interest  charge  or  original  method of determining the interest charge may be applied after the reduction ends  to  the  entire outstanding  indebtedness,  including  any  indebtedness incurred when a reduced interest charge applied and disclosure  of  the  same  shall  be provided to the borrower in the written notice announcing the reduction. A  reduction  to  an  interest  charge,  including the resumption of the original interest charge or  the  original  method  of  determining  the interest  charge,  shall not be considered an amendment of the agreement for purposes of this paragraph.  (c) The aggregate unpaid  principal  amount  of  all  such  loans  and advances  to  a  borrower made pursuant to this subdivision by a bank or trust company at  any  one  time  outstanding  shall  be  determined  by agreement  between such bank or trust company and the borrower except to the extent that such loans or advances are made pursuant  to  a  written agreement  providing for establishing credits for a primarily commercial or business use or purpose or  for  investment  in  or  purchase  of  an interest in an unincorporated business or commercial enterprise.  (d)  The  aggregate  unpaid principal amount of all loans and advances outstanding at any time pursuant to this subdivision shall be  repayable at  regular  periodic  intervals of not more than one month and for such term as agreed upon by such bank or  trust  company  and  the  borrower; provided,  however,  that  nothing herein shall prohibit a bank or trust company from providing in any agreement for the omission of payments for three consecutive specified months during any consecutive  twelve  month period.  The  initial installment of any loan or advance may be deferred for a period of not more than sixty-five days from the date of such loan or advance; provided, however, that the installments payable during  any such  period on any prior loans or advances shall not be affected by any such deferment. Provided, however,  that  an  agreement  may  require  a minimum installment as agreed upon by the parties.   The  borrower  may  at  any time prepay the amount owing in part or in full, with interest to the date of prepayment.   Notwithstanding the  foregoing  provisions  of  this  paragraph,  each installment  or  other  amount paid by the borrower to the bank or trust company may be applied to interest, insurance premiums, service charges, fines and principal in the order named, or in any  such  manner  as  the agreement  may  provide. The term "installment" may be deemed to include or exclude amounts  to  be  applied  to  interest,  insurance  premiums, service charges and fines.  (e)  The  fees  and charges authorized by this paragraph and paragraph (b) of this subdivision  shall  be  inclusive  of  all  charges  to  the  borrower  incident to investigating and making any such loan or advance. No fee, commission, expense, or other charge to the borrower  whatsoever shall  be  taken,  received,  reserved,  or  contracted  for,  except as provided  in  this  subdivision.  In  addition  to  the  interest charge permitted under paragraph (b) of this subdivision,  the  bank  or  trust company  may charge, receive and collect any one or more of the fees and charges described in this paragraph,  provided  that  any  such  fee  or charge is set forth in the written agreement with the borrower. The bank or  trust  company may contract with the borrower for the payment by the borrower of: (i) a service charge either as a percentage  or  an  amount upon each such check or other written, electronic or telephonic order or request  which is approved; (ii) a charge in an amount or percentage for each check or other written, electronic or telephonic order  or  request to  obtain  money  from  a credit line that cannot be approved since the borrower is in violation of the terms of the  agreement  or  payment  of such  order  or  request  would cause borrower to be in violation of the terms of the agreement; (iii) a fee for any  installment  which  is  not paid  on  or before the date on which it is due. A bank or trust company that imposes the charge described in this subparagraph without  allowing a grace period of at least ten days must credit any cash payment made by a  borrower  to  a teller at a branch where deposits are accepted by the bank or trust company, as of the date of receipt of  the  payment;  (iv) the  actual  expenditures,  including  reasonable  attorneys'  fees  for necessary court process; (v) in case the bank or trust company insures a borrower in accordance with applicable insurance law, including but  not limited  to  under  a  credit  unemployment insurance policy, group life insurance  policy,  group  health  insurance  policy,   group   accident insurance  policy,  or  group  health  and accident insurance policy, an amount for each month which,  notwithstanding  any  other  law,  may  be computed  on  the  amount  of  the borrower's entire unpaid indebtedness under this subdivision except in the case of a loan or  loan  commitment made  under  this  subdivision  for educational purposes as specified in subdivision five-b of this section, and then on  an  amount  no  greater than  the  unpaid balance of the borrower's scheduled periodic payments, whether due or not due, upon the loan or loan commitment, at a rate  not in  excess  of the premiums chargeable for such month in accordance with rate schedules then in effect and on file  with  the  superintendent  of financial  services  for such insurance by the insurer; (vi) if loans or advances may be obtained by use of a credit card issued by the  bank  or trust  company  to  the  borrower,  an  annual fee for membership in the credit card plan. If the borrower has requested the issuance of a credit card, the fee for the first year may be charged by  the  bank  or  trust company  at any time. The bank or trust company shall in each subsequent year in which an annual fee is payable, send the borrower in or with the statement for the monthly billing period before that in which the fee is to be billed, a notice that the annual fee will be billed  in  the  next monthly  statement.    A  borrower who is not delinquent or otherwise in breach of any term of the agreement with the bank or trust company shall have the right during the first six  months  after  the  annual  fee  is billed to notify the bank or trust company in writing, at its address on the  credit agreement, to terminate the borrower's account and request a refund of the unused portion of the annual  fee  previously  paid.  Upon receipt of the termination notice and refund request from such borrower, the  bank  or  trust company shall refund to the borrower the unused pro rata share of any annual fee previously paid as  of  the  first  billing statement  date  after  receipt  of the termination notice; and (vii) an overlimit charge which may be  imposed  whenever  the  specified  credit limit  is exceeded but not more than once in a monthly billing cycle. If  the overlimit charge is imposed, the credit limit must be  disclosed  on the  monthly billing statement; and (viii) a returned payment charge, in the amount set forth in section 5-328 of the  general  obligations  law, for  any  check  or  other  method  of  payment that is returned unpaid, excluding payment made by automated teller machine or  other  electronic media;  (ix)  a  charge  for replacement of lost or stolen credit cards, which charge shall be applied only where a borrower has suffered a  lost or  stolen  credit card after two replacements thereof; (x) a charge for additional credit cards for the borrower's account; and  (xi)  a  charge for  copies  of  sales slips, cash advance slips, monthly statements and other documents when such copies are not required by  federal  or  state law governing billing error disputes.   The  fees  and  charges  set  forth  in  this  paragraph  shall not be considered in applying sections 190.40 and 190.42 of the penal law.  For purposes  of  12 U.S.C. §§  85, 1831d, 1463(g) and 1785(g), the fees and charges permitted under this paragraph are interest under New York  law, and  all  terms, conditions, and other provisions of a written agreement between a bank or  trust  company  and  a  borrower,  including  without limitation,  fees  and  charges,  provisions  related  to  the method of determining the outstanding balance  on  which  an  interest  charge  is imposed  and  circumstances  in which an interest charge may be avoided, are material to the determination of the interest rate  under  New  York law.  (f)  No bank or trust company shall require a borrower to keep any sum on deposit, or to make deposits in lieu of regular periodic  installment payments,  or  to  do  or  refrain  from doing any other act which would entail additional expense or sacrifice, as a condition precedent to  the entering  into  of  the agreement or granting of a loan or advance under the authority of this subdivision, except  as  provided  in  subdivision five-b  of this section, provided, however, that nothing herein shall be construed to prohibit a borrower  from  agreeing  that  such  loans  and advances  may  be  disbursed by crediting a demand deposit account to be opened or maintained by the borrower on the same terms  as  are  offered generally by the bank or trust company to all or any class or classes of demand  deposit  customers,  and  provided further, that a bank or trust company may require a  pledge  to  such  bank  or  trust  company  of  a specifically identified interest-bearing deposit account at such bank or trust  company  as  collateral  security for a loan made by such bank or trust company under the authority of this subdivision.   5-a. A bank or trust company may make loans  secured  by  mobile  home chattel  paper  evidencing a monetary obligation incurred to finance the purchase of a mobile home located at the time of such purchase, or to be located within ninety days, at a semipermanent site within the state  or in  a  contiguous  state  and  to  be  maintained  as a residence of the borrower,  the  borrower's  spouse,   child,   grandchild,   parent   or grandparent.  (1) For this subdivision:  (i)  "mobile  home  chattel  paper"  means  written evidence of both a monetary obligation and a security  interest  of  first  priority  in  a mobile home and any equipment installed or to be installed therein; and  (ii)   "mobile   home"  or  "manufactured  home"  means  a  structure, transportable in one or more sections, which in the traveling  mode,  is eight  body  feet or more in width or forty body feet or more in length, or when erected on site, is three hundred twenty or  more  square  feet, and  which  is built on a permanent chassis and designed to be used as a dwelling with or  without  a  permanent  foundation  when  connected  to required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein.  (2)  If the loan is for the purpose of financing the purchase of a new mobile home,  (i)  it shall mature not later than two hundred forty months after the date thereof, and  (ii) the amount advanced shall not exceed one hundred per cent of  the sum  of  (a)  the  manufacturer's  invoice  price  of  such  mobile home (including any installed equipment), excluding  freight,  plus  (b)  the invoice  price  of the manufacturer of any new equipment installed or to be installed by the dealer, excluding freight.  (3) If the loan is for the purpose of financing the purchase of a used mobile home,  (i) it shall mature not later than two hundred forty months after  the date of the loan, and  (ii)  the amount advanced shall not exceed one hundred per cent of the purchase price of the used mobile home actually paid  or  the  wholesale value  of  such  mobile  home  (including  any  installed  equipment) as established in the dealer's market, whichever is the lower.  (4) The loan shall be payable in equal or substantially equal  monthly installments  calculated  from the date of the loan. Interest, which may be taken in advance, may be charged thereon, computed from the  date  of the  loan to the date of the last installment payable thereunder, if the loan has a maturity (i) not exceeding thirty-seven months, at a rate not to exceed six dollars per annum discount per one hundred dollars of  the face amount or ten dollars if the interest so computed is less than that amount,  or  (ii) exceeding thirty-seven months, at a rate not to exceed five dollars per annum discount per one  hundred  dollars  of  the  face amount  or  ten  dollars,  if the interest so computed is less than that amount; provided that the interest which may be charged, if  it  exceeds ten  dollars,  shall  not  exceed  one  per cent per month on the unpaid principal balance.  (5) The authorized interest shall  include  all  charges  incident  to investigating and making any loan. No fee, commission, expense, or other charge  shall  be  permitted  except  that the bank or trust company may contract to charge the borrower (i) the fees payable to a public officer to perfect any lien or other security interest taken to secure the loan, or the premium, not in excess of such fee, payable for any insurance  in lieu of such filing; (ii) in case of default, and in accordance with the instrument  evidencing the obligation, either a fine in an amount not to exceed five per cent  on  any  installment  which  has  become  due  and remained  unpaid  for  a  period in excess of ten days, but no such fine shall exceed five dollars and only one fine shall be  collected  on  any such installment regardless of the duration of the default, and provided further  that should the aggregate of such fines collected in connection with any loan exceed two per cent of such loan  or  twenty-five  dollars the  bank  or  trust  company shall refund such excess within sixty days after the loan is paid in full, or, subject to an allowance of  unearned interest  attributable to the amount in default, interest on each amount past due at a rate not in excess of one per cent per  month  during  the period   of   delinquency;  (iii)  the  actual  expenditures,  including reasonable attorney's fees for necessary court process, and (iv) in case the bank or trust company insures a borrower under a credit unemployment insurance policy, group life, health, accident, or health  and  accident insurance  policy,  or  requires insurance on the property securing such loan, an amount not in excess of the premiums  lawfully  chargeable.  No bank  or  trust  company  shall  require  a borrower to place any sum on deposit, or to make deposits in lieu  of  regular  periodic  installment payments,  or  to  do  or  refrain  from doing any other act which would entail additional expense or sacrifice, as a condition of a mobile  home  loan,  as the superintendent may from time to time approve. No refund or excess fines shall be required if it amounts to less than one dollar.  (6) A borrower may prepay the loan in full or, with the consent of the bank  or  trust company, may refinance the loan. In such event, the bank or trust company shall refund: (1) the unearned portion of the  interest to  the  borrower  the  amount  of  which  portion  shall  be determined according to a generally accepted actuarial method; provided that if the interest previously deducted (i) was less than ten  dollars,  no  refund shall  be required; or (ii) exceeded ten dollars and the earned interest is less than that amount, the bank or trust company may retain  such  an additional  amount  as will bring the earned interest to ten dollars and refund the remainder, and provided further,  that  unless  the  loan  is refinanced,  no  refund shall be required if it amounts to less than one dollar; and (2) if a charge was made to the borrower  for  premiums  for insuring  the  borrower  under  a  credit unemployment insurance policy, group life insurance policy, or under a group health, group accident  or group  health and accident insurance policy, the excess of the charge to the borrower therefor over the premiums paid or payable by the bank,  if such  premiums  were  paid  or  payable  by  the  bank  or trust company periodically, or the refund  for  such  insurance  premium  received  or receivable  by  the  bank  or trust company, if such premium was paid or payable in a lump sum by the bank or trust company. No such refund  need be  made  if  it  amounts  to less than one dollar. In the event (i) the maturity of the loan is accelerated due to the default of  the  borrower or  otherwise  and  judgment  is  obtained,  or  (ii)  repayment is made pursuant to any  such  insurance  policy,  the  borrower  or  his  legal representative, as the case may be, shall be entitled to the same refund as  if  the loan had been prepaid in full on the date of acceleration or repayment.  (7) As a condition of any loan  made  pursuant  hereto,  the  borrower shall  certify  that the mobile home, for the purchase of which the loan is made, is intended to be maintained in the state or  in  a  contiguous state  as  a  residence  of  the borrower, the borrower's spouse, child, grandchild, parent or grandparent. If the mobile home shall  not  be  so maintained  on the ninetieth day next succeeding the date of the loan or if it is relocated so as to no longer be  located  in  the  state  or  a contiguous  state  at any time before the first anniversary of the loan, the loan and all authorized charges shall  become  immediately  due  and payable  subject  only to the refund provisions of paragraph six and the borrower may, if the contract so provides, be  required  to  pay  as  an additional  authorized  charge, a penalty in an amount not to exceed two per cent of the face amount of the loan.  (8) No investment shall be made by a bank or trust company pursuant to this subdivision if the total amount invested by  it  pursuant  to  this subdivision exceeds, or by the making of such investment will exceed, an amount  equal  to  fifteen  per  cent of the assets of the bank or trust company.  (9) Subject to such limitations and conditions as  the  superintendent of  financial  services  may  prescribe by general regulation, a bank or trust company may make a loan pursuant to  this  subdivision  which  the federal  housing  administrator  has insured or has made a commitment to insure and may receive and hold such debentures as  are  issued  by  the federal  housing administrator in payment of such insurance, or which is guaranteed pursuant to the provisions of the act  of  congress  entitled the  "Servicemen's  Readjustment  Act  of  1944."  No  law of this state prescribing or limiting the interest rate  upon  loans  or  advances  of credit or prescribing a penalty for violation thereof or prescribing the nature,  amount  or  form  of  security or requiring security upon which  loans or advances of credit may be made or prescribing or  limiting  the period for which loans or advances of credit may be made or limiting the amount  of any class of loans, advances of credit or purchases which may be  made  shall  be  deemed  to  apply  to  loans, advances of credit or purchases made or  to  loans  acquired  by  purchase  pursuant  to  this paragraph.   5-b.  Notwithstanding  any  inconsistent  provision of this section, a bank or trust company may make loans for the purpose  of  defraying  the cost of education of one or more students at a university or college, or at  an  elementary  or  secondary school providing education required of minors which may  provide  for  (i)  payment  of  origination  fees,  or guarantee  fees  in  such amounts as the superintendent may from time to time  approve;  (ii)  capitalization  of  interest,  provided  that  the borrower  has the option to avoid capitalization by paying such interest without penalty; and (iii) deferral and forbearance  of  payments  under circumstances  for  which  such deferral or forbearance could be granted for loans made pursuant to Title IV of the Higher Education Act of  1965 (20 USC 1070 et seq.).   6.  The  knowingly  taking, receiving, reserving or charging a greater rate of interest than that authorized by this  section  as  computed  by this  section,  shall  be  held  and adjudged a forfeiture of the entire interest which the note, bill of exchange  or  other  evidence  of  debt carries  with  it, or which has been agreed to be paid thereon, and if a greater rate of interest has been paid, the person paying  the  same  or his  legal  representative  may  recover  from the bank or trust company twice the entire amount of the interest thus paid.   7. Upon an advance of money, whether or not repayable on demand, to an amount not less than five thousand dollars, made upon documents of title within article seven  of  the  uniform  commercial  code  or  negotiable instruments  within  article  three  or  article  eight  of  the uniform commercial code pledged as collateral security for such  repayment,  any bank  or trust company may receive or contract to receive and collect as compensation for making such advance any sum which may be agreed upon by the parties to such transaction; provided that such advance is (a) to or for any partner of  a  firm  which  is  a  member  firm  of  a  national securities   exchange   registered  with  the  securities  and  exchange commission  as  a  national  securities  exchange  under   the   federal securities  exchange  act of 1934, as amended, to enable such partner to make a contribution of capital to such firm or to purchase stock  of  an affiliated  corporation  of  such  firm,  provided  that such partner is actively engaged in the business of such  firm  and  devotes  the  major portion  of his time thereto, or (b) to or for any person who is or will become a holder of stock of a corporation which is a member  corporation of such a national securities exchange to enable such person to purchase stock  of  such  corporation  or  to  purchase  stock  of  an affiliated corporation of such corporation, provided that such person  is  actively engaged  in  the  business  of  such  corporation  and devotes the major portion of his time thereto.   8. (a) The  superintendent  shall  have  the  power  to  prescribe  by regulation  (i) the maximum charge which may be imposed in this state by a bank or trust company in connection with  a  check  or  other  written order  drawn  upon it on insufficient funds, irrespective of whether the instrument is paid, accepted, or returned by  the  bank,  and  (ii)  the maximum  charge  which  may  be imposed in this state by a bank or trust company in connection with a check or other written order received by it for deposit or collection and subsequently dishonored and  returned  for any reason by the drawee.  (b)  No  bank  or trust company shall, in connection with the payment, acceptance or return of such check  or  order,  impose  any  fee,  fine, commission  or  other  charge,  however  designated,  in addition to the maximum charge established therefore by the superintendent of  financial services  pursuant  to  paragraph  (a)  of this subdivision, except that nothing herein expressed shall prevent a  bank  or  trust  company  from taking,  receiving, reserving or charging interest, as authorized by law in connection with credit extended in connection  with  the  payment  of such  check  or  order  or from imposing any charge in accordance with a written agreement established  in  accordance  with  the  provisions  of subdivision  five  of  this  section. A bank or trust company may, as an accommodation to its customers, pay, accept, or return a check or  order without   charge,  or  at  a  lesser  charge  than  the  maximum  charge established by the superintendent of financial services.  (c) In prescribing a maximum charge pursuant to paragraph (a) of  this subdivision,  the  superintendent  shall consider the following factors: (i) the cost of processing an overdraft or returned check or  order,  as the  case  may  be,  (ii)  the  charge  necessary to deter overdrafts or returned checks or orders, as the case may  be,  and  (iii)  such  other economic  or  cost  factors  that  the  superintendent  shall deem to be appropriate. Prior to the superintendent's prescribing any such  maximum charge,  the  superintendent  shall  issue a written determination as to such maximum charge, reciting the cost and other  data  upon  which  the determination is based.  (d)  The  superintendent  of  financial  services  may promulgate such regulations as he or she deems necessary and  proper  to  implement  and define  the  provisions  of  this  subdivision.  The  superintendent  of financial services may prescribe maximum charges from time to time,  but not  more  often  than  once  in any six month period, and shall provide reasonable notice to the public of any change in such  maximum  charges, of the effective date of such change, which shall not be less than seven days  following  the  adoption  of  such change by the superintendent of financial services, and of any rule or regulation  adopted  pursuant  to this subdivision.   9.  A  bank  or  trust  company  may,  in  the  case  of  business  or agricultural loans in the amount  of  twenty-five  thousand  dollars  or more,  take,  receive, reserve, and charge on any loan or discount made, or upon any note, bill of exchange, or other evidence of debt,  interest at  a  rate  of  not more than five per centum in excess of the discount rate on ninety-day commercial paper in effect  at  the  Federal  Reserve Bank  of  New York, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt has to run.