17:9A-59.6. Interest rate; insurance premiums; credit cards; annual fee

A. Notwithstanding the provisions of R.S. 31:1-1 or any other law to the contrary, the rate or rates on advance loans shall be as agreed to by the bank and the borrower. Interest may be reckoned according to any method authorized by R.S. 31:1-1.

The contract may provide that the interest rate may be increased, or may be decreased, or both, from time to time; provided, however, that no increase in interest shall be effective unless: (a) 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 borrower that clearly and conspicuously describes such change and the indebtedness to which it applies and states that the incurrence by the borrower 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 borrower agrees in writing to the increase or the borrower 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 a rate of interest shall not apply in the case of an agreement which expressly prohibits changing of interest rates or which provides limitations on changing of interest rates which are more restrictive than the requirements of this paragraph. If the contract provides for the possibility of an increase or decrease, or both, in the rate, that fact shall be clearly described in plain language, in at least 8-point boldface type on the face of the contract.

B. For the purposes of this section, charges for premiums advanced by the bank for credit life insurance, or credit accident and health insurance, or both, shall be treated as part of the principal balance owing on an advance loan, but no such charge shall be included in determining the maximum permissible indebtedness as limited by section 11 of this act.

C. Notwithstanding the provisions of any other law to the contrary, a bank which issues a credit card in connection with an advance loan contract in effect between the bank and the borrower as authorized by this act may charge the borrower a fee not exceeding $15.00 per annum on an annual or monthly basis; except that, if under the advance loan contract, the bank may lend the borrower an amount of $5,000.00 or more, the bank may charge the borrower a fee not exceeding $50.00 per annum on an annual or monthly basis. The charge so made (1) may be collected in advance, (2) shall be in addition to and not in substitution for any other fee or charge authorized by this act, and (3) shall not be deemed to be an interest charge.

L.1959, c. 91, p. 224, s. 6. Amended by L.1968, c. 64, s. 6; L.1981, c. 37, s. 6, eff. Feb. 12, 1981; L.1981, c. 103, s. 4, eff. March 31, 1981; L.1984, c. 225, s. 1, eff. Dec. 26, 1984.