17:3B-8 - Periodic percentage rates - New Jersey Statutes

17:3B-8.  Periodic percentage rates5.  Periodic percentage rates.  If the agreement governing the revolving credit plan  provides that the periodic percentage rates of interest under the plan may increase or decrease, the increase or decrease shall take place only in correspondence with the movement of the market interest rate index specified in the revolving credit plan agreement, which index shall be readily verifiable by the borrower and beyond the control of the lender.  Periodic percentage rate increases, based on a rise in the interest rate index, may be made at the option of the lender. Periodic percentage rate decreases shall be made whenever there is a decrease in the interest rate index which results in an interest rate which is less than the interest rate then applicable to the note or loan, except that the revolving credit plan agreement may stipulate a percentage decrease in the interest rate index below which a corresponding decrease in the periodic percentage rate need not be made by the lender, provided that the index decrement shall be the same as the index increment used for interest rate increases.  Interest rate increases may, and interest rate decreases shall, apply to all outstanding  unpaid  indebtedness  under  the  plan  on  or  after the effective date of the rate variation, as provided in the plan agreement.

L.1985,c.81,s.5; amended 1997, c.12, s.1; 1997, c.33, s.2.