N.Y. Comp. Codes R. & Regs. tit. 23 § 600.14

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

Section 600.14 - Lease financing transaction disclosure formatting and contents

Disclosures for lease financing, as defined in section 600.1(w) of this Part, shall comply with the requirements of this section.

(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; and

(3) in the third column:

(i) "This is how much funding will provide:";

(ii) if any portion of the amount financed will be used to satisfy obligations under another financing with the provider, 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 first column the following language: "Annual Percentage Rate (APR)";

(2) in second column, the annual percentage rate calculated in accordance with section 600.3 of this Part; and

(3) in the third column, the following language:

"APR is the 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 periodic payments you make, and the anticipated cost for you to acquire the property at the end of the lease term.

Your APR is not an interest rate."

(d) The third row of the table shall include only the following information:

(1) in first column the following language: "Finance Charge";

(2) in second column, the total 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 included in the finance charge.

(e) The fourth row of the table shall include only the following information:

(1) in the first column: "Total Payment Amount";

(2) in the second column, the total dollar amount of payments the recipient will make during the term of the contract if the recipient makes minimum required payments and exercises the purchase option under the agreement; and

(3) in the third column: "This is the total dollar amount of payments you will make during the term of the contract (including the cost of the purchase option)."

(f) The fifth row of the table shall include only the following information:

(1) in the first column the following language: "Payment";

(2) if periodic payments during the term of the transaction will not vary then:

(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, followed by the price of the purchase option; and

(ii) in the third column, a short explanation of the payment and purchase option. For example: "This is how much you will pay each month, the $300 maintenance fee due 12 months after you receive funding, and the purchase price you may pay at the end of the lease to acquire the property." The provider may also include a short explanation describing when each payment will become due. For example: "Your monthly payments are due on the 1st day of every month."; and

(3) if periodic payments during the term of the transaction vary, the second and third column 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, followed by the price of the purchase option. 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

Purchase Price: $1000

Payments 1-23: $600/month Payment 24: $2000

Maintenance Fee Due 2/1/2021: $500 Maintenance Fee Due 8/1/2022: $300

Purchase Price: $1000

(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 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 finance charges other than interest accrued and unpaid, then the following statement: "If you pay off the financing before the end of the term, you will be required to pay all or a portion of the finance charge other than accrued and unpaid interest, up to $."; and

(2) in all other cases, the following statement: "If you pay off the financing before the end of the term, then 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 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, then the following statement: "If you pay off the financing before the end of the term, then you must pay additional fees or charges, including" followed by a description of any prepayment charges; and

(2) in all other cases, the following statement: "If you pay off the financing before the end of the term, then you will not be required to pay additional fees or charges."

(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 fourth row, and the additional row shall include only the following information:

(1) in the first column, the following language: "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, language explaining that the recipient will not be required to make monthly payments and explaining how the provider has 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.Y. Comp. Codes R. & Regs. Tit. 23 § 600.14

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