A08423 Summary:
| BILL NO | A08423 |
| SAME AS | SAME AS S05213 |
| SPONSOR | Levenberg |
| COSPNSR | |
| MLTSPNSR | |
| Amd §303, Pers Prop L | |
| Limits the amount of certain credit service charges in motor vehicle retail installment contracts. | |
A08423 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
TITLE OF BILL: An act to amend the personal property law, in relation to limiting the amount of certain credit service charges in motor vehicle retail installment contracts PURPOSE OR GENERAL IDEA OF BILL: The purpose of this legislation is to cap the amount of a credit service charge that can be imposed on motor vehicle retail installment contracts to 16% annually. SUMMARY OF PROVISIONS: Section 1: Subdivision 1 of section 303 of the Personal Property Law is amended to limit retail installment contracts at a rate not to exceed $16 dollars per $100, per annum. Section 2: Establishes the effective date. DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE): Not application at this time. JUSTIFICATION: In New York, motor vehicle financing is done through motor vehicle retail installment contracts where a finance company allows the buyer to pay for the vehicle in installments in exchange for a credit service charge. The credit service charge is a form of interest, and the retail installment contract operates similarly to a loan but is not subject to our usury limits. Unfortunately, these contracts can charge customers interest in amounts well over the usury cap. New York consumers have seen interest rates upwards of 24% for the purchase of new or used vehi- cles. This extremely high amount of credit service charge has led to consumer paying more service charge than principal for the vehicle. This bill reinstates previously imposed credit service charge limits to no more than sixteen percent; aligning with the civil usury cap. PRIOR LEGISLATIVE HISTORY: A.4485 and S.4774 of 2023/2024 A.819 and S.3237 of 2021/2022 A.7585 and S.5947 of 2019/2020 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: There are no fiscal implications associated with the passage of this legislation. EFFECTIVE DATE: This act shall take effect on the 30th day after it shall have become law.