N.Y. Comp. Codes R. & Regs. tit. 23 § 600.10

Current through Register Vol. 46, No. 43, October 23, 2024

Section 600.10 - Closed-end financing disclosure formatting and contents

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."

N.Y. Comp. Codes R. & Regs. Tit. 23 § 600.10

Adopted New York State Register February 1, 2023/Volume XLV, Issue 05, eff. 2/1/2023