Current through Register Vol. 46, No. 52, December 24, 2024
Disclosures for asset-based lending transactions, provided in
accordance with Financial Services Law section 807, shall comply with the
formatting requirements of this section.
(a) The provider shall present the required
disclosures in a table consisting of twelve rows and three columns.
(b) All three columns of the first row of the
table shall be combined, and within the cell created, the provider shall
provide an explanation, in italics, of all assumptions used to calculate the
disclosures, and a notice, if applicable, that actual costs may differ
substantially from those disclosed. For example: "The calculations below assume
you draw at origination, you maintain an outstanding balance of that amount
for, and that the amount owed us is paid off thereafter according to the terms
of the contract. Actual costs may differ substantially."
(c) The second 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; and
(3) in the third
column, in the order listed and in the same paragraph:
(i) "This is the maximum amount of 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 if you request
the maximum amount 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 owed for the recipient's other
obligations changes.
(iv) If, as a
condition of 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.
(d)
The third row of the table shall include only the following information:
(1) in the first column, 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, the following
language in the order listed:
(i) "APR is the
estimated cost of your financing expressed as a yearly rate. APR incorporates
the amount and timing of the funding you receive, finance charges you pay, and
the payments we collect. APR is not an interest rate."; and
(ii) a short explanation of the applicable
interest rate or rates for the transaction, if
applicable.
(e)
The fourth row of the table shall include only the following information:
(1) in the first column, the following
language: "Estimated Finance Charge";
(2) in the second column, the finance charge
calculated in accordance with section
600.2 of this Part; and
(3) in the third column:
(i) "This is the dollar cost of your
financing."; and
(ii) if the
contract provides for an adjustable interest rate or rates that are not
predetermined by the contract, then: "The interest rate under your contract
will adjust over time, so your actual finance charge may
vary."
(f) The
fifth row of the table shall include only the following information:
(1) in the first column: "Estimated Total
Payments";
(2) in the second
column, the total estimated payments the recipient will make during the term of
the contract if the recipient makes minimum required payments; and
(3) in the third column: "This is the total
amount of payments you will make during the term of the contract based upon the
assumptions described above."
(g) The sixth row of the table shall include
only the following information:
(1) in the
first column, the following language: "Payment"; and
(2) the second and third columns shall be
combined, and in the resulting cell, the provider shall provide a short
explanation of how balances on the account are repaid.
(h) The seventh row of the table shall
include only the following information:
(1) in
the first column, the following language: "Draw Period";
(2) in the second column, the draw period for
the transaction; and
(3) in the
third column, a short explanation of the draw period for the
transaction.
(i) The
eighth 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";
(2) in the second
column, the term of the transaction; and
(3) in the first column, the eighth and ninth
rows shall be combined and shall include the following language:
"Prepayment".
(j) In the
ninth 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 finance charges other than interest accrued and unpaid, then
the following statement: "If you pay off the financing faster than required,
you still must pay all or a portion of the finance charge, up to $ based upon
our estimates."; and
(2) in all
other cases, the following statement: "If you pay off the financing faster than
required, you will not be required to pay any portion of the finance charge
other than unpaid interest accrued."
(k) In the tenth row, the second and third
columns shall be combined and shall include:
(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, then the following statement: "If you pay off the
financing faster than required, you must pay additional fees of.";
and
(2) in all other cases, the
following statement: "If you pay off the financing faster than required, you
will not be required to pay additional fees."
(l) The eleventh 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.
(m) The twelfth 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.
