§ 351. Restrictions on loans subject to the provisions of this
article; interest; other charges. 1. Every licensee hereunder may loan
any sum of money not exceeding the maximum principal amounts prescribed
in section three hundred forty of this article, and may charge, contract
for, and receive thereon interest at the rate or rates agreed to by the
licensee and the borrower. Such interest may either (a) be calculated on
the actual unpaid principal balances of the loan or in the case of a
loan commitment from the date of each advance thereunder for the actual
time outstanding, according to a generally accepted actuarial method at
a fixed or variable rate and in accordance with the provisions of the
evidence of the indebtedness or (b) precomputed under subdivision five
of this section.

2. On any loan with a variable rate of interest made pursuant to this
subdivision, the rate shall be determined at regular intervals as set
forth in the evidence of indebtedness and in accordance with such
regulations as the superintendent of financial services shall prescribe
but said rate shall not vary more often than once in any three month
period and shall be based on a published index that is (a) readily
available, (b) independently verifiable, (c) beyond the control of the
licensee, and (d) approved by the superintendent.

The superintendent of financial services shall adopt regulations,
including but not limited to: (i) providing for disclosure to the
borrower by the licensee of the circumstances under which the rate may
increase, any limitations on the increase, the effect of an increase and
an example of the payment terms that would result from an increase; (ii)
providing for disclosure to the borrower by the licensee of a history of
the fluctuations of the index over a reasonable period of time; and
(iii) providing for notice to the borrower from the licensee prior to
any rate increase or change in the terms of payment.

3. Loans may be granted under an open end or closed end loan agreement
providing for a fixed or variable rate.

4. Interest, consideration, or charges for the use of money shall not
be deducted or received in advance and shall be computed on unpaid
principal balances. Such interest, consideration, or charges shall not
be compounded; provided that, if part or all of the principal amount of
any loan contract is the unpaid principal balance of a prior loan, the
unpaid interest, consideration or charges for the use of money on such
prior loan which have accrued within sixty days before the making of
such loan contract may be incorporated as interest bearing principal in
the principal amount of such loan contract, and for the purposes of this
subdivision any such new loan shall be deemed a separate loan
transaction.

5. When a closed-end loan agreement requires repayment in
substantially equal and consecutive monthly installments of principal
and interest combined, the interest may be precomputed at the agreed
rate on scheduled unpaid principal balances according to the terms of
the agreement and added to the principal amount of the loan. Every
payment may be applied to the combined total of principal and
precomputed interest until the loan agreement is fully paid and the
acceptance or payment of interest on loans made under the provisions of
this subdivision shall not be deemed to constitute payment, deduction or
receipt thereof in advance nor compounding under subdivision four of
this section. Such precomputed interest shall be subject to the
following adjustments:

(a) If the loan agreement is prepaid in full by cash, a new loan,
refinancing or otherwise before the final installment date, the borrower
shall receive a refund of (i) the unearned portion of the interest the
amount of which portion shall be determined according to a generally
accepted actuarial method; provided, however, that if the amount of
precomputed interest (A) is less than ten dollars, no refund shall be
required; or (B) exceeds the sum of ten dollars and the earned interest
is less than that amount, the licensee may retain such an additional
amount as will bring the earned interest to ten dollars and refund the
remainder, and provided further, that unless the loan is refinanced, no
refund shall be required if it amounts to less than one dollar; and (ii)
if a charge was made to the borrower for credit related insurance for
insuring the borrower the excess of the charge to the borrower therefor
over the insurance charges paid or payable by the licensee, if such
insurance charges were paid or payable by the licensee periodically, or
the refund for such insurance charges received or receivable by the
licensee, if such premium was paid or payable in a lump sum by the
licensee, provided that no such refund shall be required if it amounts
to less than one dollar. In the event (i) the maturity of the loan is
accelerated due to the default of the borrower or otherwise and judgment
is obtained, or (ii) repayment is made pursuant to any credit related
insurance policy for which a charge was made to the borrower for the
premium thereon, the borrower or legal representative, as the case may
be, shall be entitled to the same refund of interest and insurance
charges as if the loan had been prepaid in full on the date of
acceleration or repayment.

(b) (i) In the event of default of more than ten days in the payment
of any scheduled installment, the licensee may charge and collect a
default charge not exceeding five percent of the installment in default.
This charge may not be collected more than once for the same default and
may be collected at the time of such default or at any time thereafter.

(ii) After the final due date or upon acceleration of maturity for
default, the licensee may charge interest at the original agreed rate on
actual unpaid balances if the loan agreement so provides.

(c) If payment of all unpaid installments on which no default charge
has been charged and collected is deferred one or more full months, and
if the loan agreement so provides, the licensee may charge and collect
an amount which shall be equal to the difference between the refund that
would be required for prepayment in full as of the scheduled due date of
the first deferred installment and the amount which would be required
for prepayment in full as of one month prior to said date, multiplied by
the number of months in the deferment period. The deferment period is
that period in which no scheduled payment has been made and in which no
payment is required by reason of the deferment. Such charge may be
collected at the time of deferment or may be collected at any time
thereafter. If a refund of precomputed interest is required during a
deferment period the borrower shall also receive a refund of the
deferment charge for the number of months remaining in said period, for
which purpose a portion of a month exceeding fifteen days shall be
deemed a month.

(d) If two or more installments or parts thereof are in default for
five days or more, the licensee may, if the loan agreement so provides,
elect to convert the loan from a precomputed one to one in which
interest is paid on actual unpaid balances. In this event, the licensee
shall make the same refund of interest as if the loan were prepaid in
full on the scheduled payment due date preceding the date of conversion
and thereafter may charge interest at the agreed rate, by the actuarial
method, on actual unpaid balances for the time actually outstanding.

6. * (a) In addition to the interest, consideration, or charges above
specified, no further or other charge or amount whatsoever for any
examination, service, brokerage, commission, expense, fee, or bonus or
other thing or otherwise shall be directly or indirectly charged,
contracted for, or received, except the premium or identifiable charge
for insurance authorized by section three hundred fifty-seven of this
article; the lawful fees, if any, actually and necessarily paid out by
the licensee to any public officer for filing, recording, or releasing
in any public office any instrument securing the loan, which fees may be
collected when the loan is made or at any time thereafter or non-filing
insurance premiums not in excess of seven dollars in lieu of filing,
recording or releasing any such instrument; an annual fee on open end
loans authorized by the superintendent and made pursuant to subdivision
three of this section, provided, however, that no such fee shall exceed
an amount equal to one percent of the amount of the loan or fifty
dollars, whichever is less; and a fee, not to exceed the amount set
forth in section 5-328 of the general obligations law, for return by a
depository institution of a dishonored check, negotiable order of
withdrawal, or share draft.

* NB Effective until June 30, 2025

* (a) In addition to the interest, consideration, or charges above
specified, no further or other charge or amount whatsoever for any
examination, service, brokerage, commission, expense, fee, or bonus or
other thing or otherwise shall be directly or indirectly charged,
contracted for, or received, except the premium or identifiable charge
for insurance authorized by section three hundred fifty-seven of this
article; the lawful fees, if any, actually and necessarily paid out by
the licensee to any public officer for filing, recording, or releasing
in any public office any instrument securing the loan, which fees may be
collected when the loan is made or at any time thereafter or non-filing
insurance premiums not in excess of seven dollars in lieu of filing,
recording or releasing any such instrument; and a fee, not to exceed the
amount set forth in section 5-328 of the general obligations law, for
return by a depository institution of a dishonored check, negotiable
order of withdrawal, or share draft.

* NB Effective June 30, 2025

(b) Any licensee which knowingly receives, reserves or charges a
greater rate of interest than that authorized by this section shall
forfeit the entire interest which the note, or other evidence of debt
carries with it, or which has been agreed to be paid thereon, and if a
greater rate of interest has been paid, the person paying the same or
his legal representative may recover from the licensee twice the entire
amount of interest thus paid.

* (c) In addition to other such information as the superintendent may
require, any licensee which charges an annual fee on open end loan
accounts shall annually report, in a manner and form prescribed by the
superintendent, information to the department on open end loan
borrowers, which shall include: average annual income of borrowers at
the time of the loan, average amount of loans outstanding at the end of
each calendar year, average interest charged, average amount of annual
fees, and geographic distribution of loans made by the licensee.

* NB Repealed June 30, 2025