N.Y. Comp. Codes R. & Regs. tit. 3 § 401.6

Current through Register Vol. 46, No. 45, November 2, 2024

Section 401.6 - Place of business; conduct of business

(a)

(1) The place of business designated in the license shall be open each business day during normal business hours except where otherwise authorized by the superintendent. If the superintendent authorizes a licensed location to be open for business only during certain days or hours, the licensee shall post on the window the days and hours such office is open.

(2) A closed-end loan agreement shall provide for payments of principal, or principal and interest combined, to be made not less frequently than one each month beginning not more than one month and 15 days after the date the loan is made.

(b)

(1) A licensee may enter into an open-end loan agreement with a borrower which shall provide for a credit in a principal amount not exceeding the maximum amount permitted by Banking Law, section 340 against which one or more advances to or for the account of the borrower may be made, either at the time the credit is established or thereafter from time to time, or both, by means of honoring or causing to be honored one or more written orders or requests of the borrower, or one or more checks or drafts negotiated by the borrower. Interest shall be computed on the unpaid aggregate principal amount of advances determined by adding the amounts unpaid for each day of the monthly billing cycle and dividing the sum by the number of days in the billing cycle. The term billing cycle shall have the same meaning as set forth in section 226.2(a)(4) of Regulation Z of the Federal Reserve Board.

(2) An open-end loan agreement shall provide for payments at intervals at least monthly for such term as agreed upon by the licensee and the borrower and may provide that the payments to be made after an advance shall be larger than those made before the advance.

(3) At least 14 days before the date each payment pursuant to an open-end loan agreement is due, the licensee shall deliver to the borrower, or mail to the borrower at the mailing address last known to the licensee, a statement of account covering the period for which payment will be due. Such statement shall contain all disclosures required by the Act of Congress entitled Truth-in-Lending Act (15 USC section 1501 et seq.) and the regulations and rules thereunder.

(4) Nothing in this Part is intended to authorize financings of the type permitted pursuant to the New York Retail Instalment Sales Act.

(c) When a cash payment is made pursuant to any closed-end loan agreement, the lender shall give to the person making it, at the time the payment is made, a receipt which specifies the amount applied to the outstanding loan balance and any other charges. In any case of an open-end loan agreement, the receipt shall specify the amount applied as finance charge, the amount applied to insurance premiums, if any, the amount applied to the previous balance and the amount of the new balance. If the licensee provides the borrower with a periodic billing statement which contains the information required by this paragraph, a receipt may be issued which specifies only the amount of the cash payment.

(d)

(1) Every loan agreement which is sold or otherwise transferred by a licensee shall contain printed in a size equal to at least 10-point bold type the statement:

If this agreement is sold or otherwise transferred, the borrower's rights under the law or under this agreement are in no way altered or impaired.

(2) A licensee is prohibited from selling or otherwise transferring an open-end loan agreement which it originates unless at least 15 days before such sale or transfer takes place the licensee which originated the open-loan agreement mails or delivers to the borrower at the mailing address last known to the licensee notice of such sale or transfer. Such notice shall contain a statement to the effect that the borrower may terminate the open-end loan agreement at any time and repay the outstanding unpaid balance in accordance with the terms of the loan agreement.

(3) Every licensee shall promptly notify the superintendent in writing of the date any licensed office has discontinued business and shall surrender the license for such office within fifteen days of such discontinuance.

(4) If the 10th day of a default in the payment of any scheduled installment of a precomputed interest loan falls on a Sunday, a legal holiday, or a Saturday (if the office of the licensee at which payment is to be made is closed on Saturday), the borrower shall have all of the next business day in which to pay said installment before a default charge may be imposed.

(5) Except upon written request of the borrower, no licensee shall impose a deferment charge on a precomputed interest loan if the amount tendered is sufficient to pay the full amount in default plus any default charge owing thereon.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 401.6