This is a suit by plaintiff to collect the balance due, plus interest, on a promissory note. The primary borrowers are in default; the coborrower Christopher Marciano, who was not present at the consummation of the loan, has actively defended the case. He will be referred to hereafter as defendant. As a result of prior motions in the case the first count of the counterclaim and defendant's first separate defense (both based upon the Federal Truth-In-Lending Act-15 U.S.C.A. § 1601 et seq. and Regulation Z thereunder-12 C.F.R. § 226 et seq.) have been dismissed, with prejudice, due to the applicable statute of limitations, 15 U.S.C.A. § 1640(e). Factual allegations in the first separate defense remain viable only as the bases for the second, third and fourth separate defenses which assert that the loan agreement is unconscionable and/or void. See this court's order of September 25, 1979. Also surviving at this point is the second count of the counterclaim asserting liability under N.J.S.A. 17:10-14 for alleged excessive interest charges.
Having obtained answers to demands for admissions, and answers and supplemental answers to interrogatories, plaintiff now moves for summary judgment granting the relief sought in the complaint and dismissing defendant's remaining separate defenses and counterclaim. For the reasons set forth below, that motion is granted.
The following undisputed facts are:
1. The note and statement of disclosure annexed hereto-the documents upon which the action is based-are genuine and bear the signature of defendant Chris Marciano.
2. This defendant is a "co-borrower" of the $2,500 in question, which was loaned by plaintiff.
3. Defendant Marciano made at least one payment against the loan and has made no payments since September 21, 1978, at which time the balance due on the loan was reduced to $2,283.28.
4. The interest rates stated in the note and the annual finance charge stated on the statement of disclosure are the rates permissible under N.J.S.A. 17:10-14 et seq.
Defendant's answers to interrogatories and demands for admissions have reduced the bases for his remaining defenses and counterclaim to the following, as set forth in his supplemental answers to interrogatories:
11. Plaintiff's failure to reveal the annual percentage rate and its failure to have the borrower date the insurance authorization, thereby failing to have borrower authorize the insurance, constitutes a lack of meaningful disclosure. Plaintiff should have made meaningful disclosure at the time the transaction was consummated, as required by the statute and its failure to do so renders the transaction unconscionable.
14. Because the annual percentage rate is in excess of the amount permitted by law, the contract is void under the New Jersey Small Loan Act. (See N.J.S.A. 17:10-14).
19. Because the insurance authorization is undated, and the Truth-In-Lending Act requires the borrower to sign and date the insurance authorization, therefore the Act mandates that the insurance charges be added to the finance charge. Thus, the finance charge is incorrect and should be disclosed as $1,073.47. Defendant Marciano will argue that this computation should be used under the New Jersey Small Loan Act and New Jersey Retail Installment Sales Act.
20. The annual percentage rate is calculated in accordance with the instructions enclosed herewith. With the finance charge of $1,073.47 divided by the amount financed, or $2,500, the quotient equals a figure which is read in conjunction with the attached table. . . . Thus, the annual ...