§ 5-527. Enforceability of compound interest. 1. A loan or other
agreement providing for compound interest shall be enforceable
notwithstanding the date that such loan or other agreement providing for
such compound interest shall have been executed; provided, however, that
such compound interest shall begin to accrue and become due and payable
on the later to occur of (a) June twenty-fourth, nineteen hundred
eighty-nine or (b) the date that any obligation to pay such compound
interest may have arisen, including, but not limited to, the date of any
default or event of default under such loan or other agreement. For
purposes of this subdivision, the term "compound interest" shall mean
the accruing of interest upon unpaid interest irrespective of whether
such unpaid interest is added to the principal debt.

2. The provisions of this section shall not be applicable to any loan
or other financing agreement where the original principal debt is in an
amount of two hundred fifty thousand dollars or less, or to any loan or
other financing agreement secured primarily by a one or two family
owner-occupied residence. For purposes of this subdivision the term
"residence" shall include a lessee's interest in a proprietary lease
granted by a cooperative housing corporation.

3. Notwithstanding the provisions of subdivision two of this section,
nothing in this section shall affect the maximum rate of interest which
may be charged, taken or received as provided by law, or be construed to
limit, impair or otherwise affect any loan or other agreement which is,
or would be, enforceable without reference to this section, including
but not limited to an agreement made pursuant to section six-f of the
banking law.