New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 90 - Variable Rate Open-end Accounts Established By Lending Institutions › Section 90.4 - Index

Current through Register Vol. 46, No. 28, July 10, 2024
(a) General
				provisions. A single index for the open-end account shall be chosen from among
				the indices approved by the Superintendent of Banks pursuant to Part 333 of
				this Title. The rate or rates for the open-end account may be based directly on
				the index values or on the index values plus or minus additional percentage
				points; provided, however, that variations in the rate or rates shall
				correspond directly to movements in the index. This Part imposes no requirement
				on lending institutions to place limitations on the adjustment in the rate or
				rates for the open-end account, as such adjustment would otherwise be allowed
				by movements in the index. However, any lending institution which adopts
				limitations of any kind on changes in the rate shall provide for equal
				limitations on both increases and decreases. Similarly, rate adjustments may be
				rounded to the nearest percentage point or fraction thereof as determined by
				the lending institution, provided that rounding applies equally to decreases
				and increases in rates. Subject to the rounding provisions, increases in the
				index need not be used at each rate calculation date but may be accumulated
				once to the next rate calculation date, but decreases in the index must be
				reflected at each rate calculation date.
(b) Changes in the index. A lending
				institution may provide for a substitute index similar to the chosen index only
				in the event that the initial index becomes unavailable. In any other case, if
				the lending institution proposes to change the index used for the open-end
				account, application in letter form for permission to do so must be made to the
				Banking Board, and, in the case of approval for such change, a notification of
				the change must be sent to customers at least 30 days prior to the
				change.
(c) Information and
				disclosures with respect to the history of the index. The disclosure shall
				identify the index and shall contain a statement that past changes in the index
				are not necessarily predictive of future changes in the index. The lending
				institution shall provide the high and low figures for the index and the dates
				at which these levels were reached, for each of the three calendar years
				preceding the calendar year in which the open-end account is opened or when a
				variable rate provision is added to an existing account. In addition, if an
				open-end account is opened after August 31st of any calendar year or a variable
				rate provision is added to become effective after August 31st of any calendar
				year, the disclosure shall include the high and low figures for the index's
				performance through June 30th of that year, and such disclosure may be used as
				the disclosure of the high and low in index performance for the calendar year
				next preceding that calendar year in which the open-end account is opened or a
				variable-rate provision becomes effective, prior to March 1st of that
				year.