Section 303. Credit service charge limitation

1.  A retail seller may
  contract for in a retail instalment contract  and  charge,  receive  and
  collect the credit service charge authorized by this article at the rate
  or rates agreed to by the retail seller and the buyer.
    The  credit  service  charge  authorized  by this subdivision shall be
  computed on an amount equal to the total of the difference  between  the
  cash  sale price of the motor vehicle and the amount of the buyer's down
  payment and the amount of official fees, and such charge may be made  on
  the  amount  included  in the contract for insurance as determined under
  subdivision six of section three hundred two of this chapter.
    2. The credit service charge  at  the  rate  or  rates  authorized  in
  subdivision  one  shall  be  computed  on  the amounts on which they are
  respectively required to be computed as specified in subdivision one  on
  contracts  payable in successive monthly instalments substantially equal
  in amount extending for a period of one year. On contracts providing for
  instalments extending for a period less than or greater than  one  year,
  the credit service charge shall be computed proportionately.
    3. When a retail instalment contract provides for unequal or irregular
  instalments,  the  credit service charge shall be at the effective rates
  provided in subdivision one, having  due  regard  for  the  schedule  of
  instalments.
    4.  As an alternative to the credit service charge provided for above,
  a retail seller may contract for in a  retail  instalment  contract  and
  charge,  receive  and  collect a credit service charge calculated on the
  unpaid balances  of  an  amount  computed  as  provided  in  the  second
  paragraph  of  subdivision one above, for the time outstanding according
  to a generally accepted actuarial method at rates  that  may  vary  from
  time  to  time and in accordance with the provisions of the contract. On
  any contract with a variable rate credit service charge made pursuant to
  this subdivision the rate shall be determined at  regular  intervals  as
  set forth in the contract and in accordance with such regulations as the
  banking  board  shall  prescribe but said rate shall not vary more often
  than once in any three month period and shall be based  on  a  published
  index  that  is (a) readily available, (b) independently verifiable, (c)
  beyond the control  of  the  retail  seller  and  (d)  approved  by  the
  superintendent.
    The  banking  board  shall  adopt  regulations  with respect to retail
  installment contracts that provide for a variable rate of credit-service
  charge, including but not limited to: (a) providing  for  disclosure  to
  the buyer by the retail seller of the circumstances under which the rate
  may increase, any limitations on the increase, the effect of an increase
  and  an example of the payment terms that would result from an increase;
  (b) providing for disclosure to the buyer by  the  retail  seller  of  a
  history  of  the  fluctuations  of the index over a reasonable period of
  time; and (c) providing for notice to the buyer  by  the  retail  seller
  prior to any rate increase or change in the terms of payment.
    5.  The  credit  service  charge  shall  be  inclusive  of all charges
  incident to investigating and making the contract, and for the extension
  of the credit provided for in the contract and no fee, expense or  other
  charge  whatsoever  shall be taken, received, reserved or contracted for
  except as provided in this section,  in  subdivision  seven  of  section
  three  hundred  two and three hundred six and, if expressly provided for
  in the retail instalment contract the amount of official fees as defined
  in section three hundred one  and  the  amount,  if  any,  included  for
  insurance pursuant to subdivision five of section three hundred two.
    6.  Notwithstanding  the  maximum  credit service charge authorized by
  this article, such maximum credit service charge shall not apply to  any
  retail installment sale insured or guaranteed in whole or in part by the

  Federal  Housing  Administration,  the  Veterans  Administration, or any
  other department or agency of the United States government.