17:16C-44.1 - Retail charge account; time price differential; rate; computation
17:16C-44.1. Retail charge account; time price differential; rate; computation (a) Notwithstanding any other law to the contrary, a retail seller, sales finance company, banking institution or other holder may charge, receive and collect a time price differential in each billing period on obligations incurred pursuant to any retail charge account, which shall be determined as specified in the terms of the account, subject to the limitations provided herein. Such time price differential for each monthly billing period shall not exceed the amount resulting from applying the periodic rates provided herein to the greater of the following amounts (including unpaid time price differentials):
(i) The average daily balance of the account for such billing period, or
(ii) The balance of the account at the beginning or end of such billing period.
The periodic rate or rates shall not exceed an amount agreed to by the retail seller, sales finance company, banking institution, or other holder and the retail buyer.
The terms of the retail charge account may provide that the time price differential may be increased or may be decreased or both from time to time; provided, however, that no increase shall be effective unless: (1) at least 90 days prior to the effective date of the first such increase, or 30 days prior to the effective date of any subsequent increase, a written notice has been mailed or delivered to the retail buyer that clearly and conspicuously describes such change and the indebtedness to which it applies and states that the incurrence by the retail buyer or another person authorized by him of any further indebtedness under the plan to which the agreement relates on or after the effective date of the increase specified in the notice shall constitute acceptance of the increase and (b) either the retail buyer agrees in writing to the increase or the retail buyer or another person authorized by him incurs such further indebtedness on or after the effective date of the increase stated in the notice. The provisions of this paragraph permitting an increase in the time price differential shall not apply in the case of an agreement which expressly prohibits changing of the time price differential or which provides limitations on changing of the time price differential which are more restrictive than the requirements of this paragraph. If the terms of the retail charge account provide for the possibility of an increase or decrease, or both, in the time price differential, that fact shall be clearly described in plain language, in at least 8-point bold face type on the face of the written notice.
Notwithstanding the foregoing limitation, if the terms of the account so provide, the time price differential may be computed on the median amount within a specified range. Such time price differential for each monthly billing period shall not exceed the amount resulting from applying the respective periodic rates specified above to the median amount within the specified range in which the greater of the amounts specified in (i) and (ii) is included; provided, subject to the classifications and differentiations as may reasonably be established by the retail seller, sales finance company, banking institution or other holder, the same time price differential is charged on all balances within the specified range and provided further that the time price differential determined by applying the respective periodic rates specified above to the median amount within the range does not exceed by more than 8% the amount of the time price differential determined by applying the respective periodic rates specified above to the lowest amount in the range.
(b) If the billing period is not monthly, the maximum periodic rate shall be that rate which bears the same relation to the respective periodic rates per month specified above as the number of days in the billing period bears to 30.
(c) Notwithstanding the limitation provided in (a) above, for any monthly billing period in which a time price differential may be charged pursuant to the terms of the account a minimum time price differential of not more than $0.50 may be charged; if the billing period is not monthly, a minimum time price differential may be charged in such amount which bears the same relation to $0.50 as the number of days in the billing period bears to 30.
L.1971, c. 409, s. 17. Amended by L.1981, c. 103, s. 14, eff. March 31, 1981.