Consumer Leasing_Part3.pdf

V. Lending — Consumer Leasing Examination Checklist – Consumer Leasing Yes No iv. Residual value (§1013.4(f)(4)) v. Depreciation and any amortized amounts (§1013.4(f)(5)) vi. Rent charge (§1013.4(f)(6)) vii. Total of base periodic payments (§1013.4(f)(7)) viii. Lease payments (§1013.4(f)(8)) ix...

V. Lending — Consumer Leasing Examination Checklist – Consumer Leasing Yes No iv. Residual value (§1013.4(f)(4)) v. Depreciation and any amortized amounts (§1013.4(f)(5)) vi. Rent charge (§1013.4(f)(6)) vii. Total of base periodic payments (§1013.4(f)(7)) viii. Lease payments (§1013.4(f)(8)) ix. Basic periodic payment (§1013.4(f)(9)) x. Itemization of other charges (§1013.4(f)(10)) xi. Total periodic payment (§1013.4(f)(11)) G. Regarding early termination: i. Conditions under which the lessee or lessor may terminate the lease prior to the end of the lease term (§1013.4(g)(1)) ii. The amount or description of the method for determining the amount of any penalty or other charges for early termination (§1013.4(g)(1)) iii. In a form substantially similar to the sample (§1013.4(g)(2)) H. Regarding notice of wear and use: i. A statement specifying whether the lessor or the lessee is responsible for maintaining or servicing the leased property, with a description of the responsibility (§1013.4(h)(1)) ii. A statement of the lessor’s standards for wear and use, which must be reasonable (§1013.4(h)(2)) iii. In a form substantially similar to the sample (§1013.4(h)(3)) I. Purchase option (§1013.4(i)) J. Statement referencing other nonsegregated disclosures (§1013.4(j)) K. Liability between residual and realized values (§1013.4(k)) L. Right of appraisal (§1013.4(l)) M . For open-end leases: i. The rent and other charges paid by lessee (§1013.4(m)(1)) ii. Liability at end of lease term based on residual value and any excess liability (§1013.4(m) and (m)(2)) iii. M utually agreeable final adjustment (§1013.4(m)(3) FDIC Consumer Compliance Examination Manual — March 2022 V–10.7 V. Lending — Consumer Leasing Examination Checklist – Consumer Leasing Yes No N. Fees and taxes (§1013.4(n)) O. Regarding insurance: P. i. Are the types and amounts of insurance that the lessee is required to have disclosed?(§1013.4(o)) ii. If the lessor provides insurance, are the types, amounts, and cost also disclosed? (§1013.4(o)(1)) Warranties or guarantees (§1013.4 (p)) Q. Penalties and other charges for late payments, delinquency, or default (§1013.4(q)) R. Security interest other than a security deposit (§1013.4(r)) S. Regarding any information on rate: i. Does the lessor provide a percentage rate in an advertisement or in documents evidencing the lease transaction? (§1013.4(s)) ii. If so, does the lessor refrain from using the term “annual percentage rate,” “annual lease rate,” or any equivalent term in the lease disclosure? (§1013.4(s)) iii. Does a statement that “this percent may not measure the overall cost of financing this lease” accompany the rate? (§1013.4(s)) 13. Are disclosures given to lessees when they “renegotiate” or “extend” their leases? (§1013.5) 14. If the institution provides disclosures via electronic communication does it do the following: (§1013.6(b)) A. Obtain a consumer’s affirmative consent when providing disclosures related to a transaction? (§1013.6(c)) B. Provide disclosures either by: (§1013.6(d)) i. Sending to consumer’s electronic address? (§1013.6(d)(1)) OR ii. M aking the disclosures available at another location (such as a website)? (§1013.6(d)(2)) C. If making the disclosure available at another location, does the institution: (§1013.6(d)(2)) i. Alert the consumer of the availability of disclosures by sending a notice to their electronic address or postal address? (§1013.6(d)(2)(i)) ii. Reference the account involved (if applicable) and the address of location where the disclosure is available? (§1013.6(d)(2)(ii)) AND iii. Is the disclosure available for at least 90 days from the date the disclosure first becomes available or from the date the notice alerting the consumer of the disclosure, whichever comes later? ((§1013.6(d)(2)(ii)) V–10.8 FDIC Consumer Compliance Examination Manual — March 2022 V. Lending — Consumer Leasing Examination Checklist – Consumer Leasing Yes No D. If the electronic communication is returned, takes reasonable steps to attempt redelivery of disclosures returned undelivered? (§1013.6(e) 15. Does the bank advertise its leasing program? If so, A. Do the advertisements advertise terms that are usually and customarily available? (§1013.7(a)) B. Are the advertisements clear and conspicuous? §1013.7(b)) i. Are any affirmative or negative references to a charge that is part of the disclosure required under paragraph (d)(2)(ii) less prominent than the disclosure (except for the statement of a periodic payment? (§1013.7(b)(1)) ii. Are the advertisements of lease rates less prominent than any disclosure required by section 4 (except the notice of the limitations on rate)? (§1013.7(b)(2)) C. Do catalog and multiple page advertisements comply with the page reference requirements? (§1013.7(c)) D. If any triggering terms are used, are all the following disclosures made? (§1013.7(d)(2)) i. That the transaction advertised is a lease . ii. The total amount due prior to or at consummation or by delivery, if delivery occurs after consummation. iii. The number, amounts, and due dates or periods of scheduled payments under the lease. iv. A statement of whether or not a security deposit is required. v. A statement that an extra charge may be imposed at the end of the lease term where the lessee’s liability (if any) is based on the difference between the residual value of the leased property and its realized value at the end of the lease term. 16. Do merchandise tags which use triggering terms refer to a sign or display that contains the additional required disclosures (§1013.7(e)) 17. Do television or radio advertisements that do not contain the additional information required by section 4(d)(2) direct consumers to a toll-free number or written advertisement for additional information when triggering terms are used? (§1013.7) A. Is the toll free number listed along with a reference that the number may be used by a consumer to obtain the information? (§1013.7(f)(1)(i)) B. Does the written advertisement that is in general circulation in the community served by the station including the name and date of the publication, and is published beginning at least three days before and ending at least ten days after broadcast? (§1013.7(f)(1)(ii)) C. Has the toll-free telephone number been available for no fewer than ten days, beginning on the date of broadcast? (§1013.7(f)(2)(i)) FDIC Consumer Compliance Examination Manual — March 2022 V–10.9