New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 91 - Variable Rate Retail Instalment Credit Agreements Established By Retail Sellers › Section 91.4 - Index

Current through Register Vol. 46, No. 28, July 10, 2024
(a) General
				provisions. A single index for the credit account shall be chosen from among
				the indices approved by the Superintendent of Banks pursuant to Part 334 of
				this Title. The rate for the credit 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 shall correspond directly to
				movements in the index. This Part imposes no requirement on creditors to place
				limitations on the adjustment in the rates for the credit account, as such
				adjustment would otherwise be allowed by movements in the index. However, any
				creditor 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 creditor, 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 or changes in the
				spread between the index values and the actual rate charged. A creditor 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 creditor
				proposes to change the index used for the credit account or to change the
				percentage spread between the index values and the rate charged on the 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. In the
				case of a change in the percentage spread between the index values and the
				actual rate charged, Banking Board permission need only be obtained where the
				change would be adverse to the account customer.
(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 retail seller 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 credit account is opened or when a variable rate provision is added
				to an existing account. In addition, if a credit 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 the calendar year in
				which the credit account is opened or a variable rate provision becomes
				effective, prior to March 1st of that year.