"It seems to be similar to a credit card. You pay
Post# of 15187
Posted On: 05/28/2016 12:54:02 AM
"It seems to be similar to a credit card. You pay 16% but if you default then interest and penalties are incurred that go way beyond the typical usury laws and they are all perfectly legal "
In addition, the late charge provision of the letter agreement, which awarded a 120% per annum penalty, "while not technically interest, is unreasonable and confiscatory in nature and therefore unenforceable when examined in the light of the public policy expressed in Penal Law § 190.40, which makes an interest charge of more than 25% per annum a criminal offense" (Sandra's Jewel Box v 401 Hotel, 273 AD2d 1, 3 [2000]; see also BDO Seidman v Hirshberg, 93 [*5]NY2d 382 [1999]; Quaker Oats Co. v Reilly, 274 AD2d 565 [2000]).
http://law.justia.com/cases/new-york/other-co...28069.html
KBM's penalty is $2,000 a day or $730,000 a year on a $43,000 note. Of course that's compounded since the penalty becomes part of the principal and interest is then charged on it.
In addition, the late charge provision of the letter agreement, which awarded a 120% per annum penalty, "while not technically interest, is unreasonable and confiscatory in nature and therefore unenforceable when examined in the light of the public policy expressed in Penal Law § 190.40, which makes an interest charge of more than 25% per annum a criminal offense" (Sandra's Jewel Box v 401 Hotel, 273 AD2d 1, 3 [2000]; see also BDO Seidman v Hirshberg, 93 [*5]NY2d 382 [1999]; Quaker Oats Co. v Reilly, 274 AD2d 565 [2000]).
http://law.justia.com/cases/new-york/other-co...28069.html
KBM's penalty is $2,000 a day or $730,000 a year on a $43,000 note. Of course that's compounded since the penalty becomes part of the principal and interest is then charged on it.
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