§ 5-527 — Enforceability of compound interest

New York § 5-527

• Jurisdiction: New York
• Law GOB: General Obligations
• Title 5: Interest and Usury; Brokerage On Loans
• Art. 5: Creation, Definition and Enforcement of Contractual Obligations

Text

§ 5-527. Enforceability of compound interest. 1. A loan or other\nagreement providing for compound interest shall be enforceable\nnotwithstanding the date that such loan or other agreement providing for\nsuch compound interest shall have been executed; provided, however, that\nsuch compound interest shall begin to accrue and become due and payable\non the later to occur of (a) June twenty-fourth, nineteen hundred\neighty-nine or (b) the date that any obligation to pay such compound\ninterest may have arisen, including, but not limited to, the date of any\ndefault or event of default under such loan or other agreement. For\npurposes of this subdivision, the term "compound interest" shall mean\nthe accruing of interest upon unpaid interest irrespective of whether\nsuch unpaid interest is added to the principal debt.\n 2. The provisions of this section shall not be applicable to any loan\nor other financing agreement where the original principal debt is in an\namount of two hundred fifty thousand dollars or less, or to any loan or\nother financing agreement secured primarily by a one or two family\nowner-occupied residence. For purposes of this subdivision the term\n"residence" shall include a lessee's interest in a proprietary lease\ngranted by a cooperative housing corporation.\n 3. Notwithstanding the provisions of subdivision two of this section,\nnothing in this section shall affect the maximum rate of interest which\nmay be charged, taken or received as provided by law, or be construed to\nlimit, impair or otherwise affect any loan or other agreement which is,\nor would be, enforceable without reference to this section, including\nbut not limited to an agreement made pursuant to section six-f of the\nbanking law.\n