N.Y. Banking Law § 173 Rate of Interest; Effect of Usury

• Library: New York Statutes
• Edition: 2023
• Currency: Current through 2023 NY Law Chapter 682

1. No private banker shall take, receive, reserve or charge on any loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest as computed pursuant to this section, at a rate greater than the rate prescribed by the superintendent of financial services pursuant to section fourteen-a of this chapter, or, if no rate has been so prescribed, six per centum per annum, or two dollars if the interest so computed is less than that amount. Such interest may be taken in advance, reckoning the days for which the note, bill or evidence of debt has to run. The knowingly taking, receiving, reserving or charging a greater rate of interest shall be held and adjudged a forfeiture of the entire interest which the note, bill of exchange or other evidence of debt carries with it, or which has been agreed to be paid thereon. If a greater rate of interest has been paid, the person paying the same or his legal representatives may recover twice the entire amount of the interest thus paid from the private banker. The purchase, discount or sale of a bona fide bill of exchange, note or other evidence of debt payable at another place than the place of such purchase, discount or sale at not more than the current rate of exchange for sight draft, or a reasonable charge for the collection of the same, in addition to the interest, shall not be considered interest for the purpose of any law regulating the maximum rate of interest which may be charged, taken or received.

Anything contained in this subdivision to the contrary notwithstanding, the charging of interest or discount on a loan or discount at an office of a private banker located outside of the states of the United States of America and the District of Columbia at a rate allowed by the laws of the country, territory, dependency, province, dominion, insular possession or other political subdivision where such office is located, or the acquisition by a private banker of a part interest or the entire interest in any loan or discount heretofore or hereafter made by a bank or trust company or any other banking institution at an office located outside of the states of the United States of America and the District of Columbia, shall not be a violation of this section.

1-a. Anything contained in this section to the contrary notwithstanding, any private banker, in purchasing or otherwise acquiring, any note or other evidence of debt, which has arisen out of the sale of personal property or the performance of services on credit and which is repayable in instalments from the payee or holder thereof, may take, receive, reserve or charge an amount not exceeding twelve per centum per annum, computed pursuant to this section on unpaid principal balances, or the sum of ten dollars, whichever is the greater; provided, however, that nothing contained in this subdivision shall authorize a private banker to take, receive, reserve or charge upon the purchase or other acquisition of any two or more notes or other evidences of debt, arising out of the same transaction, an amount greater than such private banker would be entitled to take, receive, reserve or charge if all of such obligations constituted a single obligation. In the event that the private banker insures, under a group insurance policy, the life of the person primarily liable on any such obligation, or in the event that the private banker requires insurance on personal property securing any such obligation, the actual cost of such insurance may be added to the amount which such private banker may take, receive, reserve or charge upon the purchase or other acquisition of such obligation. This subdivision shall not be in derogation of any powers, rights or privileges possessed by any private banker prior to the effective date this subdivision.