N.Y. Comp. Codes R. & Regs. tit. 23 § 600.15

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

Section 600.15 - General asset-based lending transaction disclosure formatting and contents

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.

N.Y. Comp. Codes R. & Regs. Tit. 23 § 600.15

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