June 21, 2001
Steel & Machinery Transport, Inc.
P.O. Box 2310
Hammond, Indiana 46323-2310
Dear Mr. Mori:
This is in response to your May 31, 2001 letter. You state that you have a premium finance contract with Transamerica Insurance Finance Corporation that allows for late fees as permitted by New York State Law. Your company was charged a late fee of 5% of the payment due. You asked for a copy of the applicable provision of New York law.
The law governing premium finance agencies is contained in Article 12-B of the New York State Banking Law. Specifically, section 569 (copy enclosed) of that Article covers delinquency, collection and cancellation charges, as well as attorney's fees. It allows for payment by the insured/borrower of a delinquency and collection charge on each instalment in default for not less than five days in an amount of one dollar to a maximum of 5% of such instalment.
I hope this is helpful.
Sharon A. Cherry