Current through Register Vol. 46, No. 39, September 25, 2024
Disclosure for commercial financing that does not meet the
definition of a closed-end financing transaction, sales- based financing,
commercial open-end financing, factoring transaction, lease financing, or
asset-based lending transaction, 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 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";
(2) in the
second column, the amount financed; and
(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 owed 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 include a short explanation that the amount
paid directly to the recipient may change if the amounts 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; and
(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, the following
language: "Annual Percentage Rate (APR)";
(2) in the second column, the annual
percentage rate calculated in accordance with section
600.3 of this Part; and
(3) in the third column, the following, in
order:
(i) "APR is the cost of your financing
expressed as a yearly rate. APR incorporates the amount and timing of the
funding you receive, and payments paid by you or on your behalf to. APR is not
an interest rate."; and
(ii) a
short explanation of any assumptions made by the provider to calculate
APR.
(d) The
third row of the table shall include only the following information:
(1) in the first column, the following
language: "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, the provider's
calculation of the finance charge, with the amount and description of each
expense that is included in the finance charge.
(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, then: "Total Payment Amount"; and
(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, then: "Total Estimated Payment Amount";
(2) in the second column, the total dollar
amount of payments or total dollar amount of 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:
(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, then: "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, then: "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, the following
language: "Payment"; and
(2) the
second and third columns shall be combined, and shall contain the following
information in order:
(i) the amount of each
periodic payment, followed by a forward slash (/) and the frequency of each
periodic payment. If the provider anticipates that the periodic payment amount
will vary over the term of the transaction, then the provider shall list all
periodic payment amounts and the time periods when those payments apply. For
example:
Months 1-2: $20/day Months 3-7: $40/day; and
(ii) the date and amount of any
irregular payments listed in chronological order.
(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
eighth rows shall be combined and shall include the following language:
"Prepayment."
(i) In the seventh
row, the second and third column 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 $.";
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."
(j) In
the eighth 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."
(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, then the provider shall insert one
additional row below the third row, and the additional row shall include only
the following information:
(1) in the first
column, the following language: "Monthly Cost";
(2) in the second column, the monthly cost
that the recipient will pay over the term of the transaction. If the provider
anticipates that the estimated monthly cost will vary over the term of the
transaction, then the provider shall list the estimated monthly costs and the
time periods when those estimates apply. For example:
Months 1-2: $600/month Months 3-6: $1200/month Month 7:
$1000/month; and
(3) in the
third column, a short explanation of how the provider calculated the monthly
cost. For example: "Although you do not make payments on a monthly basis, this
is our calculation of your average monthly cost based upon the payment amounts
disclosed below."
(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 a short explanation of how the provider has based the
disclosure on the minimum payment permitted under the contract.
