§ 351. Restrictions on loans subject to the provisions of this\narticle; interest; other charges. 1. Every licensee hereunder may loan\nany sum of money not exceeding the maximum principal amounts prescribed\nin section three hundred forty of this article, and may charge, contract\nfor, and receive thereon interest at the rate or rates agreed to by the\nlicensee and the borrower. Such interest may either (a) be calculated on\nthe actual unpaid principal balances of the loan or in the case of a\nloan commitment from the date of each advance thereunder for the actual\ntime outstanding, according to a generally accepted actuarial method at\na fixed or variable rate and in accordance with the provisions of the\nevidence of the indebtedness or (b) precomputed under subdivision five\nof this section.\n 2. On any loan with a variable rate of interest made pursuant to this\nsubdivision, the rate shall be determined at regular intervals as set\nforth in the evidence of indebtedness and in accordance with such\nregulations as the superintendent of financial services shall prescribe\nbut said rate shall not vary more often than once in any three month\nperiod and shall be based on a published index that is (a) readily\navailable, (b) independently verifiable, (c) beyond the control of the\nlicensee, and (d) approved by the superintendent.\n The superintendent of financial services shall adopt regulations,\nincluding but not limited to: (i) providing for disclosure to the\nborrower by the licensee of the circumstances under which the rate may\nincrease, any limitations on the increase, the effect of an increase and\nan example of the payment terms that would result from an increase; (ii)\nproviding for disclosure to the borrower by the licensee of a history of\nthe fluctuations of the index over a reasonable period of time; and\n(iii) providing for notice to the borrower from the licensee prior to\nany rate increase or change in the terms of payment.\n 3. Loans may be granted under an open end or closed end loan agreement\nproviding for a fixed or variable rate.\n 4. Interest, consideration, or charges for the use of money shall not\nbe deducted or received in advance and shall be computed on unpaid\nprincipal balances. Such interest, consideration, or charges shall not\nbe compounded; provided that, if part or all of the principal amount of\nany loan contract is the unpaid principal balance of a prior loan, the\nunpaid interest, consideration or charges for the use of money on such\nprior loan which have accrued within sixty days before the making of\nsuch loan contract may be incorporated as interest bearing principal in\nthe principal amount of such loan contract, and for the purposes of this\nsubdivision any such new loan shall be deemed a separate loan\ntransaction.\n 5. When a closed-end loan agreement requires repayment in\nsubstantially equal and consecutive monthly installments of principal\nand interest combined, the interest may be precomputed at the agreed\nrate on scheduled unpaid principal balances according to the terms of\nthe agreement and added to the principal amount of the loan. Every\npayment may be applied to the combined total of principal and\nprecomputed interest until the loan agreement is fully paid and the\nacceptance or payment of interest on loans made under the provisions of\nthis subdivision shall not be deemed to constitute payment, deduction or\nreceipt thereof in advance nor compounding under subdivision four of\nthis section. Such precomputed interest shall be subject to the\nfollowing adjustments:\n (a) If the loan agreement is prepaid in full by cash, a new loan,\nrefinancing or otherwise before the final installment date, the borrower\nshall receive a refund of (i) the unearned portion of the interest the\namount of which portion shall be determined according to a generally\naccepted actuarial method; provided, however, that if the amount of\nprecomputed interest (A) is less than ten dollars, n
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