§ 410 — Add-ons to and consolidations of retail instalment contracts and obligations

§ 410. Add-ons to and consolidations of retail instalment contracts\nand obligations. 1. A retail instalment contract or obligation which\notherwise conforms to the requirements of this article may contain the\npromise or agreement of the buyer to pay in substantially equal periodic\ninstalments the consolidated total of the principal balance thereof and\nthe unpaid time balance or balances owing by the buyer under one or more\nprevious contracts or obligations, together with a credit service\ncharge; if it does so:\n (a) The contract or obligation shall set forth all items required to\nbe disclosed by the act of congress entitled "Truth in Lending Act" and\nthe regulations thereunder, as such act and regulations may from time to\ntime be amended.\n (b) Subject to the provisions of section four hundred four and to the\nprovisions of paragraph (c) of this subdivision, the credit service\ncharge to be included in such consolidated total may equal but shall not\nexceed the larger of the amounts determined by applying the credit\nservice charge at the rate or rates agreed to by the buyer:\n (1) to the total of the principal balance of the subsequent contract\nor obligation and the principal balance of any previous contract or\nobligation included in the consolidated total determined by deducting\nfrom the then unpaid time balance thereof any then unearned credit\nservice charge in an amount not less than the refund credit for\nanticipation provided for in section four hundred eight (computed,\nhowever, without the allowance of any minimum earned credit service\ncharge), for the period from the date thereof to and including the date\nwhen the final instalment of such consolidated total is payable; or\n (2) to the principal balance of the subsequent contract or obligation\nfor the period from the date thereof to and including the date when the\nfinal instalment of such consolidated total is payable and, if the due\ndate of the final instalment of such consolidated total is later than\nthe due date of the final instalment of any previous contract or\nobligation included in the consolidated total, on the time balance then\nunpaid on such previous contract or obligation from the date when the\nfinal instalment thereof was payable to the date when the final\ninstalment of such consolidated total is payable.\n (c) A consolidation of a retail instalment contract or obligation\nentered into after the effective date of this paragraph with a retail\ninstalment contract or obligation entered into prior to the effective\ndate of this paragraph shall be governed by the limitations on maximum\ncredit service charges contained in subdivision one of this section and\nsection four hundred four as they were in effect immediately prior to\nthe effective date of this paragraph.\n 2. Where a buyer makes any subsequent purchase of goods under a\ncontract from a seller from whom he had previously purchased goods under\none or more contracts and the amounts due under such previous contract\nor contracts have not been fully paid, and where the total of the time\nbalance of the subsequent contract and the unpaid time balances owing by\nthe buyer under the previous contracts does not exceed three thousand\ndollars, such contract, if it otherwise conforms to the requirements of\nthis article, may provide that the goods purchased under the previous\ncontract or contracts shall be security for the goods purchased under\nthe subsequent contract but only until such time as (a) the purchase\nprice under the previous contract or contracts is fully paid, or (b)\ntwenty per centum of the time sale price of the goods purchased under\nthe subsequent contract has been paid, whichever event first occurs.\n 3. When such subsequent purchase is made, the entire amount of all\npayments made previous thereto shall be deemed to have been applied\ntoward the payment of the previous purchase or purchases. Each payment\nthereafter received shall be deemed to be allocated to all of the\nvarious purchases in the same proportion or ratio as the original cash\nsale prices of the various purchases bear to one another; where the\namount of each instalment payment is increased in connection with the\nsubsequent purchase, the subsequent payments (at the seller's election)\nmay be deemed to be allocated as follows: an amount equal to the\noriginal rate, to the previous purchase, and an amount equal to the\nincrease, to the subsequent purchase. However the amount of any initial\nor down-payment on the subsequent purchase shall be deemed to be\nallocated in its entirety to such purchase. The provisions of\nsubdivisions two and three of this section shall not apply to cases\ninvolving equipment, parts or other merchandise attached or affixed to\ngoods previously purchased or repairs or services rendered by the seller\nin connection therewith at the buyer's request.\n