New York § 303 - 303Credit service charge limitation

§ 303. 303Credit service charge limitation

§ 303. Credit service charge limitation. 1. A retail seller may contract for in a retail instalment contract and charge, receive and collect the credit service charge authorized by this article at the rate or rates agreed to by the retail seller and the buyer. The credit service charge authorized by this subdivision shall be computed on an amount equal to the total of the difference between the cash sale price of the motor vehicle and the amount of the buyer's down payment and the amount of official fees, and such charge may be made on the amount included in the contract for insurance as determined under subdivision six of section three hundred two of this chapter. 2. The credit service charge at the rate or rates authorized in subdivision one shall be computed on the amounts on which they are respectively required to be computed as specified in subdivision one on contracts payable in successive monthly instalments substantially equal in amount extending for a period of one year. On contracts 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 provides for unequal or irregular instalments, the credit service charge shall be at the effective rates provided in subdivision one, having due regard for the schedule of instalments. 4. As an alternative to the credit service charge provided for above, a retail seller may contract for in a retail instalment contract and charge, receive and collect a credit service charge calculated on the unpaid balances of an amount computed as provided in the second paragraph of subdivision one above, for the time 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. On any contract with a variable rate credit service charge made pursuant to this subdivision the rate shall be determined at regular intervals as set forth in the contract 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 retail seller and (d) approved by the superintendent. The superintendent shall adopt regulations with respect to retail installment contracts that provide for a variable rate of credit-service charge, including but not limited to: (a) providing for disclosure to the buyer by the retail seller 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 retail seller of a history of the fluctuations of the index over a reasonable period of time; and (c) providing for notice to the buyer by the retail seller 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, and for the extension of the credit provided for in the contract and no fee, expense or other charge whatsoever shall be taken, received, reserved or contracted for except as provided in this section, in subdivision seven of section three hundred two and three hundred six and, if expressly provided for in the retail instalment contract the amount of official fees as defined in section three hundred one and the amount, if any, included for insurance pursuant to subdivision five of section three hundred two. 6. Notwithstanding the maximum credit service charge authorized by this article, such maximum credit service charge shall not apply to any retail installment sale insured or guaranteed in whole or in part by the Federal Housing Administration, the Veterans Administration, or any other department or agency of the United States government.