"It seems to be similar to a credit card. You pay
Post# of 15187
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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