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Banking Interpretations

NYSBL 340 and 351

April 11 , 2005

Dear [ ]:

In your letter via facsimile on February 24, 2005 to Cheryl Lewis, you asked Ms. Lewis to update a letter which I had written to you on March 27, 1990 regarding the interest rate that may be imposed by licensed lenders under Article IX of the New York Banking Law. As Ms. Lewis is not an attorney, I will address the matter you raise.

Pursuant to the provisions of Sections 340 and 351(1) of the New York Banking Law and Section 190.40 of the New York Penal Law, licensed lenders may charge interest at a rate not exceeding 25% per annum on (1) any loan not exceeding $25,000 made to an individual for personal, family, household or investment purposes; and (2) on any loan not exceeding $50,000 made for business or commercial purposes.

Section 351 of the Banking Law specifies the fees that may be charged to the borrower in addition to the interest charge.

I trust that this letter is responsive to your request.

Sincerely,

Steven Barras
First Assistant Counsel