§ 5-602. Interest on insurance draft deposits in escrow with mortgage
investing institutions. Any mortgage investing institution which
maintains an escrow account pursuant to any agreement executed in
connection with a mortgage or any loan, secured by a lien on any one to
six family residence occupied by the owner or on any property owned by a
cooperative apartment corporation, as defined in subdivision twelve of
section three hundred sixty of the tax law, (as such subdivision was in
effect on December thirtieth, nineteen hundred sixty), and located in
this state and which residence or cooperative apartment corporation
received from an insurance carrier a draft, forwarded to a mortgage
investing institution, as compensation for damage done to a residence
shall, for each quarterly period in which such escrow account is
established, credit the same with dividends or interest at a rate of not
less than two per centum per year based on the average of the sums so
paid for the average length of time on deposit or a rate prescribed by
the superintendent of financial services pursuant to section fourteen-b
of the banking law and pursuant to the terms and conditions set forth in
that section whichever is higher. The superintendent of financial
services shall prescribe by regulation the method or basis of computing
any minimum rate of interest required by this section and any such
minimum rate shall be a net rate over and above any service charge that
may be imposed by any mortgage lending institution for maintaining an
escrow account. No mortgage investing institution shall impose a service
charge in connection with the maintenance of an escrow account unless
provision therefor was expressly made in a loan contract executed prior
to the effective date of this section.