Current through Register Vol. 46, No. 52, December 24, 2024
Disclosures for closed-end financing transactions provided in
accordance with Financial Services Law section 804 shall comply with the
requirements of this section unless the closed-end financing transaction meets
the definition of sales-based financing or lease financing.
(a) The provider shall present the
disclosures in a table consisting of ten rows and three columns.
(b) The first row of the table shall include
only the following information:
(1) in the
first column, the following language: "Funding "Provided";
(2) in the second column, the amount
financed;
(3) in the third column,
the following in the order listed and in one paragraph:
(i) "This is how much funding will
provide.";
(ii) if the amount
financed is greater than the recipient funds: "Due to deductions or payments to
others, the total funds that will be provided to you directly is. For more
information on the amounts that will be deducted, please review the attached
document Itemization of Amount Financed."
(iii) If any portion of the amount financed
will be used to pay down or pay off other amounts owed by the recipient that
may change over time, and the amounts owed are known to the provider, the
provider shall also include a short explanation that the amount paid directly
to the recipient may change if the amount owed for the recipient's other
obligations changes.
(iv) If, as a
condition of the financing, a recipient's amounts owed to third parties must be
paid down or paid off using funds from the amount financed, and the amount owed
is not known to the provider, the provider shall also include a short
explanation that the amount paid directly to the recipient may change based
upon the required disbursements to satisfy other obligations.
(v) If any portion of the amount financed
will be used to satisfy obligations under another financing with the provider,
in the third column, in a second paragraph: "Does the renewal financing include
any amount that is used to pay unpaid finance charges or fees, also known as
double dipping? {Yes, enter amount}. If the amount is zero, the answer would be
No." If the financing being satisfied featured a fixed finance fee that did not
vary based on the repayment period, the provider shall consider the amount that
is used to pay unpaid finance charges or fees to be the pro rata portion of
such finance fee based upon the fraction of the original total amount financed
of the previous financing already repaid by the recipient.
(c) The second row of the table
shall include only the following information:
(1) in the first column:
(i) if the contract provides for a fixed
interest rate or rates that are predetermined by the contract, or no interest
rate, the following language: "Annual Percentage Rate (APR)";
(ii) if the contract provides for an
adjustable interest rate or rates that are not predetermined by the contract,
the following language: "Estimated Annual Percentage Rate (APR)";
(2) in the second column, the
annual percentage rate calculated in accordance with section
600.3 of this Part;
(3) in the third column:
(i) the following language, if the contract
provides for a single, fixed interest rate: APR is the cost of your financing
expressed as a yearly rate. APR includes the amount and timing of the funding
you receive, interest and other finance charges you pay and the payments you
make. Your APR is not an interest rate. Your interest rate is. Your APR may be
higher than your interest rate because APR incorporates interest costs and
other finance charges.;
(ii) the
following language, if the contract provides for a multiple pre-determined
interest rates that change over time:
APR is the cost of your financing expressed as a yearly rate.
APR includes the amount and timing of the funding you receive, interest and
other finance charges you pay and the payments you make.
Your APR is not an interest rate. Your initial interest rate
is. Your APR may be higher than your interest rate because APR incorporates
interest costs and other finance charges.;
(iii) the following language, if the contract
provides for an adjustable interest rate or rates that are not predetermined by
the contract:
APR is the cost of your financing expressed as a yearly rate.
APR includes the amount and timing of the funding you receive, interest and
other finance charges you pay and the payments you make.
APR is not an interest rate. Your initial interest rate is.
Although your interest rate will adjust over time, for the purposes of
calculating this APR estimate, we have used the initial interest rate for
future periods where the interest rate is not preset by the contract. Your APR
may be higher than your interest rate because APR incorporates interest costs
and other finance charges.; or
(iv) the following language, if no part of
the finance charge is based upon an interest rate:
APR is the cost of your financing expressed as a yearly rate.
APR includes the amount and timing of the funding you receive, finance charges
you pay and the payments you make.
Your APR is not an interest rate. The cost of this financing
is based upon fees charged rather than interest that accrues over
time."
(d) The third row of the table shall include
only the following information:
(1) in the
first column:
(i) if the contract provides
for a fixed interest rate or rates that are predetermined by the contract, or
no part of the finance charge is based upon an interest rate, the following
language: "Finance Charge"; or
(ii)
if the contract provides for an adjustable interest rate or rates that are not
predetermined by the contract, the following language: "Estimated Finance
Charge";
(2) in the
second column, the total finance charge, calculated in accordance with section
600.2 of this Part;
(3) in the third column:
(i) "This is the dollar cost of your
financing."; or
(ii) if the
contract provides for an adjustable interest rate or rates that are not
predetermined by the contract: "The interest rate under your contract will
adjust over time, so your actual finance charge may vary."
(e) The fourth row of the table
shall include only the following information:
(1) in the first column:
(i) if, assuming the recipient makes minimum
required payments under the contract, it is possible to calculate with
certainty the total payments the recipient will make during the contract's
term: "Total Payments Amount"; or
(ii) if, assuming the recipient makes minimum
required payments under the contract, it is not possible to calculate with
certainty the total payments the recipient will make during the contract's
term: "Estimated Total Payment Amount.";
(2) in the second column: The total dollar
amount of payments or total estimated dollar amount of payments the recipient
will make during the term of the contract if the recipient makes minimum
required payments;
(3) in the third
column:
(i) if, assuming the recipient makes
minimum required payments under the contract, it is possible to calculate with
certainty the total dollar amount of payments the recipient will make during
the term of the contract: "This is the total dollar amount of payments you will
make during the term of the contract."; or
(ii) if, assuming the recipient makes minimum
required payments under the contract, it is not possible to calculate with
certainty the total dollar amount of payments the recipient will make during
the term of the contract: "This is our estimate of the total dollar amount of
payments you will make during the term of the contract."
(f) The fifth row of the table
shall include only the following information:
(1) in the first column:
(i) if the periodic payments will not vary
over the term of the transaction or the periodic payments during the term of
the transaction will vary and it is possible to calculate the payment amounts
in advance, the following language: "Payment"; or
(ii) if the periodic payment amounts will
vary over the term of the transaction and it is not possible to calculate the
payment amounts in advance (e.g., due to an adjustable interest rate using a
benchmark rate and a margin), the following language: "Initial
Payment";
(2) if periodic
payments during the term of the transaction will not vary:
(i) in the second column, the amount of each
periodic payment followed by a forward slash (/) and the frequency of each
periodic payment (e.g. month, day, or other period) followed by the date and
amount of any irregular payments listed in chronological order; and
(ii) in the third column, a short explanation
of the payment frequency and any irregular payments. The provider may also
include a short explanation when payment will become due;
(3) if periodic payments during the term of
the transaction vary and it is possible to calculate the payment amounts in
advance, the second and third columns in the fourth row shall be combined and
the provider shall list the periodic payment amounts and when each amount will
become due followed by the date and amount of any irregular payments listed in
chronological order. For example:
Months 1-12: $600/month Months 13-24: $1200/month
Maintenance Fee Due 2/1/2021: $500 Maintenance Fee Due
8/1/2022: $300 or
Payments 1-23: $600/month Payment 24: $2000
Maintenance Fee Due 2/1/2021: $500 Maintenance Fee Due
8/1/2022: $300
A provider may provide such list of periodic payment amounts
and when amount will become due in a separate schedule such list cannot be
reasonably contained within the second and third columns in the fourth
row;
(4) if periodic
payments during the term of the transaction vary and it is not possible to
calculate all payment amounts in advance:
(i)
in the second column, the initial periodic payment amount followed by a forward
slash (/) and the frequency of each periodic payment followed by the date,
followed by the date and amount of any irregular payments listed in
chronological order; and
(ii) in
the third column: "This is your initial periodic payment. Your periodic payment
may adjust over time."
(g) The sixth row of the table shall include
no information in the third column, and the remaining columns shall include
only the following information:
(1) in the
first column, the following language: "Term"; and
(2) in the second column, the term of the
transaction.
(h) In the
first column, the seventh and eight rows shall be combined and shall include
only the following language: "Prepayment."
(i) In the seventh row, the second and third
columns shall be combined and include only:
(1) if, at any time during the term of the
transaction, prepayment of the outstanding balance due will require the
recipient to pay charges other than interest accrued and unpaid, the following
statement: "If you pay off the financing early, you will still need to pay all
or portion of the finance charge, up to $."; and
(2) in all other cases, "If you pay off the
financing early, you will not need to pay any portion of the finance charge
other than unpaid interest accrued (if applicable)."
(j) In the eighth row, the second and third
columns shall be combined and shall include only:
(1) if, at any time during the term of the
transaction, prepayment of the outstanding balance due will require the
recipient to pay additional fees and charges not included in the finance charge
relating to the prepayment, the following statement: "If you pay off the
financing early you must also pay the following additional fees:" followed by
the amounts and descriptions of each additional fee and charge; and
(2) in all other cases, the following
statement: "If you pay off the financing early you will not pay additional
fees."
(k) The ninth row
of the table shall include only the following information:
(1) in the first column, the following
language: "Collateral Requirements"; and
(2) the second and third columns shall be
combined and shall include only a description of the collateral requirements or
security interests of the transaction, if any.
(l) The tenth row of the table shall include
only the following information:
(1) in the
first column, the following language: "Avoidable Fees and Charges";
and
(2) the second and third
columns shall be combined and shall include only a description of all potential
fees and charges that can be avoided by the recipient, if any, including, but
not limited to, late payment fees and returned payment fees.
(m) If the contract provides for
periodic payments that are not monthly, the provider shall insert one
additional row below the fourth row, and the additional row shall include only
the following information:
(1) in the first
column: "Average Monthly Cost";
(2)
in the second column, the average monthly cost that the recipient will pay over
the term of the transaction; and
(3) in the third column: "Although this
financing does not have monthly payments, this is our calculation of your
average monthly cost for comparison purposes."
(n) If the contract provides for multiple
payment options, then the provider shall insert one additional row above the
first row, and in that row, all three columns shall be combined, resulting in a
single cell. In that cell, the provider shall include the following: "This
financing has multiple payment options. This disclosure assumes you will make
the minimum payments permitted under the contract."
