The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F eder al R eser ve Ban k o f D allas
DALLAS, TEXAS
75222
C i r c u l a r No. 77-41
M a rc h 23, 1977
R E G U LA TIO N Z — T R U T H - I N - L E N D I N G
Board In te rp re ta tio n s of R e gulation Z —
Sample Lease D is c lo s u re Statements
T O A L L BANKS
A N D O TH E R S CO N C E R N E D IN T H E
E LE VE N TH FE D E R A L RESERVE D IS T R IC T :
T h e Board o f G o v e rn o rs o f the F e d era l R e s e rv e System has issued
the sample lease d is c lo s u re statements w h ic h c o ve r th r e e types of leasing:
o p e n -e n d and c lo s e d -e n d v e h ic le le a s in g , and f u r n i t u r e le a s in g . T h e forms
a r e d is c lo s u re statem ents, not lease c o n tra c ts . A copy of the B o a rd 's o r d e r
as subm itted to the FE DE RAL REG ISTER is enclosed.
T h e Consum er Leasing A c t and the amendm ents to R egulation Z
im plem e n tin g the A c t became e ffe ctive M arch 23, 1977. T h e amendments to
Regulation Z to c a r r y out p ro v is io n s of the Consum er Leasing A c t w e r e c i r
culated Novem ber 16, 1976, in this B a n k 's C i r c u l a r No. 7 6-1 4 6 .
T h e sample forms w ill be fu r n is h e d by this Bank to State member
banks o n ly . O th e r c r e d ito r s should contact th e ir s u p e r v is o r y a g en c ie s.
A lim ited q u a n tity o f forms w ill be a v a ila b le s h o r tly . T h e s u p p ly
being p rin te d is for use as sample forms o n ly and in d iv id u a l lessors a r e e x
pected to p r i n t th e ir own stock. Requests fo r these sample forms for r e p r o
d u c in g should be d ir e c te d to the S e c r e ta r y 's Office o f th is B a nk , E xt. 6267.
S in c e r e ly y o u r s ,
R o b e rt H. B o y k in
F i r s t V ic e P re s id e n t
E nclosure
Banks and others are encouraged to use the fo llo w in g to ll-fr e e incoming WATS numbers in contacting th is Bank:
1-8 0 0 -49 2 -4 40 3 (in tra s ta te ) and 1 -8 0 0 -52 7 -4 97 0 (in te rs ta te ). For c a lls placed lo c a lly , p lease use 651 plus the
extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
E x t r a c t From
FE D E R A L R E G IS T E R ,
V O L . 42, NO. 38,
F r i d a y , F e b r u a r y 25, 1977
p p . 10970 - 10977
[Reg. Z; Docket No. R-0070)
PART 226— TRUTH IN LENDING
Board Interpretations of Regulation Z—
Sample Lease Disclosure Statements
On December 29, 1976, the Board pub
lished for comment three sam ple lease
disclosure statem ents as proposed official
Board interpretations of Regulation Z
(41 PR 56657). The statem ents were pro
posed for use in conjunction w ith three
types of lease transactions: (1) Openend or finance vehicle leases (Interpre
tatio n § 226.1501), (2) closed-end or net
vehicle leases (Interpretation § 226.1502)
and (3) fu rn iture leases (Interpretation
§ 226.1503).
T hirty w ritten comments on th e pro
posal were received. The comments have
been given careful consideration and, on
th e basis of the comments and its own
analysis, th e Board has revised the in ter
pretations and has issued them in final
form.
The comments generally supported the
design, form at and use of simplified lan
guage in the forms. The instructions
were generally considered adequate by
the com m enters; revisions to the instru c
tions will be discussed below. The com
pleted form s provided by th e Board,
which were not p a rt of th e in terp reta-.
tions, have no t been reproduced in final
form. They appeared to be a source of
confusion, and th e Board is concerned
th a t the provision of contract term s
merely as illustrations would be miscon
strued as approval of those term s for use
by lessors.
The forms have n ot been reduced to
one page for this publication. They will
be printed as soon as possible, repub
lished in the F e d e r a l R e g i s t e r and m ade
available in lim ited quantities to in ter
ested parties.
The Board wishes to emphasize, as it
did in th e December 29,1976, publication,
th a t these forms are not th e exclusive
m ethod of compliance with th e Con
sumer Leasing Act and the im plem enting
Regulation. Lessors are perm itted to de
sign other form ats by which compliance
may be achieved. Lessors th a t do choose
to use th e form s issued by th e Board,
however, m ust no t a lte r the wording or
sequence of the disclosures, except to th e
extent th a t provisions have been m ade
for deletion or substitution of term s.
Any inapplicable disclosure should be
deleted. The titles of th e forms and the
num bering system m ay be changed or
deleted, but care should be taken th a t
consistency is m aintained in th e refer
ences to item num bers in th e disclosures.
The statem ent th a t the disclosures are
provided pursuant to Federal law m ay
be deleted or changed. Brackets have
been provided around disclosures which
are alternative in n atu re (e.g., th e p u r
chase option disclosures).
The following changes have been made
to th e interpretations:
1. A statem ent th a t th e disclosures are
provided pursuant to the Federal Con
sum er Leasing A ct has been added a t
the top of all three disclosure statem ents. A sim ilar statem ent a t th e beginning of
Item 14 in S 226.1501 has been deleted.
A com m ent was received th a t th e place
m ent of th a t statem ent in Item 14 im
plied th a t th e other disclosures are not
required, when in fa c t they are.
2. In Item 2 of th e vehicle lease state
m ents (88 226.1501 and 1502) the words
“Body Style” have been substituted for
th e words “Body Make” and th e term
"Vehicle ID # ” has-been substituted for
“Serial # ” in response to comments th a t
these term s m ore accurately reflect "busi
ness usage. In Item 2 of th e fu rn iture
lease statem ent (8 226.1503), th e term
“Price” has been deleted from th e de
scription; it is no t a required term and
appeared to be confusing as it is sus
ceptible of a variety of definitions.
3. In response to a num ber of w ritten
comments, the Board has significantly
changed the disclosures of th e paym ent
due a t consummation and th e periodic
paym ent. In order to avoid double dis
closure, th e proposal provided for dis
closure in th e open-end vehicle lease
statem ent only of those elem ents of these
two disclosures which were to be used in
calculating th e “T otal Lease O bligation.”
As a consequence, there were no disclo
sures of th e total paym ent m ade by the
lessee a t consum m ation or the total
m onthly paym ent. Commenters felt th a t
disclosure of these inclusive totals was
m ore im portant th a n th e avoidance of
double disclosure.
The Board has therefore amended
8 226.1501, Item s 3 and 4, to provide these
totals. Item 3(a) consists of those ele
m ents of a to tal paym ent due a t incep
tion which will be used to calculate
"T otal Lease O bligation.” Item 3(b)
consists of all other elements of th a t total
in itial paym ent. Item 4(a) consists of
th a t portion of th e to tal m onthly pay
m ent which is attributable to rent, depre
ciation, profit and sales/use tax on th a t
paym ent. I t will be used in calculating
the “T otal Lease Obligation:” Item 4(b)
contains all other charges which may be
incurred on a m onthly basis by the lessee.
Lessors should refer to th e form ’s specific
instructions for fu rth er guidance.
The closed-end vehicle lease and the
furniture lease form s have been revised
to provide sim ilar totals w ithout the
separate elements, as there is no total
lease obligation disclosure in those types
of leases.
4. All instructions in the forms them
selves have been deleted and placed in
the accompanying instructions in re
sponse to comments th a t the form s could
be more easily reproduced w ithout them.
5. T he form s have been revised to pro
vide disclosures for leases w ith m onthly
paym ent schedules. The m ajority of con
sum er leases appear to have m onthly
schedules and differing periodic term s
can be easily substituted where a lease
provides otherwise.
t . H k sequence of disclosure has been by statin g th a t the lessee m ay have lia
dhaiqmd to provide a more m eaningful bility beyond th a t fo r the difference be
tw een estim ated and actual values as
form at.
7. 73k disclosures In Item 4 regarding a resu lt of disposition charges, unpaid
fiie num ber am ounts and d u e dates of traffic tickets and other charges Incurred
periodic paym ents have been revised to under th e lease (Item 14 (a)).
(b) A reference to th e standards Used
provide the num ber of scheduled pay-,
m ents and a sim pler m ethod of deter to determ ine unreasonable or excessive
m ining th e “T otal of Basic M onthly w ear or use, If th e lessor sets such stan d
ards (Item 14(a) 1).
Paym ents” In S 226.1501.
(c) Space has also been added In
8. T he Insurance disclosure In all
statem ents (Item 9) has been revised to w hich the lessor may set forth th e type
perm it disclosure of optional as well as of appraisal to be obtained by th e lessee
(14(b)).
required Insurance.
11. Item 13 In 5 226.1502 (closed-end
9. Item 10 In the open-end lease sta te
m ent has been am ended to perm it the vehicle statem ent) has been am ended to
lessor to sta te w hat type of value (e.g., provide disclosure of the lessee’s rig h t to
wholesale or retail) Is being placed on an appraisal a t early term ination where
th e vehicle a t th e end of th e term . A th e charge for such early term ination Is
sim ilar space is provided In Item 14(b). based on th e estim ated value of th e ve
I t has also been am ended to sta te th a t hicle. A sim ilar disclosure has n o t been
th e lessee’s liability for th e estim ated provided In th e fu rn itu re statem ent as it
value of th e vehicle “m ay be” (rath er does no t appear to be a common term
th a n “Is”) lim ited. Comments stated th a t In furn itu re leases.
th e lessee’s liability for th is sum m ay In
12. The Instructions have been revised
fa c t be unlim ited.
to provide fu rth e r guidance for use of the
10. Item 14 (End of Term Liability) of forms.
{ 226.1501 has been revised to provide
In consideration of th e foregoing th e
th e following:
B oard Issues the following Interp reta
(a)
A more precise statem ent of th etions of 12 CFR P a rt 226, effective
lessee’s liability a t the end of th e term M arch 23,1977.
§ 2 2 6 .1 5 0 1
O p en -en d o r fin a n ce v e h icle lea se disclosu re statem en t.
Dste _ _ _ _ _ _ _ _ _ _ _ _ _
These d i s c l o s u r e s a r e provided p u r s u a n t t o t h t F e d e r a l Coneuser Leas in g Act.
1.
USSOR(S)
L
D e s c r i p t i o n o f le a a e d p r o p e r t y
T®«r
Make
L
im)
/
LESSEE(S)
Model
n
fb j
V eh icle lb 4
Body S t y l e
I n i t i a l C h arge e, c o n s i s t in * o f
/C a p i t a l i z e d Coat R ed u c tio n / /T r a d e - i » A llow ance
)
O th er C harges P ay ab le a t I n c e p tio n * c o n s i s t i n g o f
/ /A dvance M onthly Payment o f
/ 7Refu nd ab le S e c u r i ty D ep o s it 7
/ / R e g i s t r a t i o n F ees / J
/D e l iv e r y Charge
T o ta l Payment Due e t I n c e p t i o n :
A.
#
( a ) B a s ic M onthly P a y n e n t:
s
( h / O th er Charges P a y a b le M onthly;
/ ^M aintenance
/ i l a g i « t t a t i o n Feea
/ /In su ran c e
/ J
)
T o ta l M onthly P ay n en t:
>•
St
7>
T ern o f t h i s l e a s e :
The f i r s t n o n th l y payment o f (
_______ su b se q u e n t payments o f |
month t h e r e a f t e r .
T o t a l o f B asic M onthly Payments:
♦
is doe on
on th n
j
o f each
1
T o t a l o f O th er Charges P ayab le t o L e ss o r:
/ /D is p o s itio n f ^ / /M aintenance ?
1
Fees and Taxes
T o t a l w u n t yon w i l l pay d a r in g th e term f o r o f f i c i a l f e e s ,
r e g i s t r a t i o n , c e r t i f i c a t e o f t i t l e , l i c e n s e l e e e and t a x e s .
I*
la s e rs a c s
' ™"
The f a llo w in g ty p e s en d -amounts o f in su ra n c e w i l l b e a c q u ir e d I n
e n a c t i o n w i t h ’t h i s l e a s e :
•'/
O
( l e s s e e ) .1 1 1 p r o v id e th e in s u r a n c e c o v e ra g e quotoS above
I s r s M i l g r m l u . c a s t o f 1 _______.
* " ( t o a o o . ) . g r o o -t p ro v id e io s u re o e e c o v e ra g e l a t b s m s t i n |
t g q i s i s t t o s b s t ab o v e .
»
U rsiB uciioira fo b C om pletion or I 326.1601—
O r n - m cb F inance Vehicle Lease Dlsclositbe Statement
-2 10.
E s tin a te d
v i I m o f tlic v e h i c l e a t t h e epd • £ t k a l e a s e t o n :
<Toar l i a b i l i t y f o r t h i s a w s a y bo U n i t e d . So* I t n M«>
1
11.
T b ta l Lease O b lig a tio n :
( I t e a s 3 ( a ) , 6 and 1 0 .)
I n i t i a l Value o f V e h ic le :
D iffe re n c e :
( I t e n 11 l e s s I t e n 1 2 .)
6ENBRAL INSTRUCTIONS
12.
1 3.
Ii,
$
Completion of this form m a r be facilitated
by reference to the following instructions.
A n y question as to the permissibility or ac
curacy of a specific disclosure m a y be an
swered by reference to Regulation Z, 12 C F R
Part 226. Parenthetical citations are to Reg
ulation Z.
Information which Is required to be dis
closed m a y be estimated if the Information
Is un known or unavailable, provided that
the information Is clearly Identified as an
estimate and the estimate Is based on the
best information available and Is reasonable
(5 226.6(f)).
A n y inapplicable disclosures should be
deleted. This form Is based on a monthly
periodic payment. A ny lessor whose lease
contemplates a different payment period
should change the form where It refers to
"monthly” amounts to read "weekly” or
other time period, as appropriate.
All numerical amounts must be stated in
figures and shall be printed In not less than
the equivalent of ten point type or elite type
written numerals or legibly handwritten
(5 226.6(a)). Paragraph numbers need not
be printed In ten point type or Its equivalent.
$
$
End of Tar. Liability
( a ) The e * t i . . c e d v a l u e o f Che v e h i c l e a t a t e d in I t e . 10 i t baa ed on a r e a s o n a b l e , good
f a i t h e a t i o a t e o f t h e v a l u e o f t h e v e h i c l e a t t h e end o f t h e l e a s e t e r a . I f t h e a c t u a l v a l o o
o f t h e v e h i c l e e t t h a t ti m e i s g r e a t e r th e n t h e e s t i n a t e d v a l u e , you w i l l have no f u r t h e r
l i a b i l i t y un d er t h i s l e a s e , excep t f o r o t h e r c h a r g e s a l r e a d y i n c u r r e d [end a r e e n t i t l e d
t o a c r e d i t o r r e f u n d o f any s u r p l u s I,
I f t h e a c t u a l v a l u e o f th e v e h i c l e i s l e s s th a n th e e s t i v a t e d v a l u e , you w i l l be l i a b l e
f o r any d i f f e r e n c e up t o 0
(3 t i o e s I t e n 4 ( . ) ) . For any d i f f e r e n c e in e x c e s s
o f t h a t am oun t, yo u w i l l be l i a b l e o n ly i f
1* E x c e s si v e u s e o r damage [ a s d e s c r i b e d i n I t e n 1SJ [ r e p r e s e n t i n g more th a n normal
w ea r and t e a r ) r e s u l t e d i n an u n u s u a l l y low v a l u e e t th e end o f t h e te rm .
2.
Tou v o l u n t a r i l y a g r e e w it h us a f t e r th e end o f t h e l e a s e t e r n to make a h i g h e r
paym ent.
3 . I h e m a t t e r i s n o t o th e r w i se r e s o l v e d and we win a l a w s u i t a g a i n s t you s e e k i n g a
h i g h e r paym ent.
Should we b r i n g a la w s u i t a g a i n s t you, we must prove t h a t our o r i g i n a l e s t i m a t e o f th e
V alu e o f t h e l e a s e d p r o p e r t y a t t h e end o f t h e l e a s e t e r n was r e a s o n a b l e and was made in
good f a i t h . For ex a m p le , we might prdve t h a t th e a c t u a l v a l u e was l e a s th a n th e o r i g i n a l
e s t i m a t e d v a l u e , a l t h o u g h t h e o r i g i n a l e s t i m a t e was r e a s o n a b l e , b e c a u s e o f an u n a n t i c i p a t e d
d e c l i n e in v a l u e f o r t h a t ty p e o f v e h i c l e .
U nles s we p ro v e t h a t t h e e x c es s amount owed was th e r e s u l t o f e x c e s s i v e
use or
u n r e a s o n a b l e wear and t e a r , we w i l l pay yo u r r e a s o n a b l e a t t o r n e y ' s f e e s .
( b ) I f you d i s a g r e e w it h th e v a l u e we
a s s i g n Co t h e v e h i c l e , you
mayo b t a i n , a t
yo ur own e x p e n s e , f r o n on in depen de nt t h i r d p a r t y a g r e e a b l e t o b o th o f a s , a p r o f e s s i o n a l
a p p r a i s a l o f t h e ___________ v alu e o f t h e l e a s e d v e h i c l e which c o u l d be r e a l i z e d a t s a l e .
The a p p r a i s e d v a l u e s h a l l t h e n be used a s t h e a c t u a l v a l u e .
13. S ta n d a r d s f o r Wear end Use
The f o l l o w i n g s t a n d a r d s a r e a p p l i c a b l e f o r d e t e r m i n in g u n r e a s o n a b l e o r e x c e s s i v e wear
and u s e o f t h e l e a s e d v e h i c l e : _____________________________________________________________________
16.
S P E C IF IC
H aln ten an ce
lYou a r e r e s p o n s i b l e f o r th e fo ll o w i n g m a in te nance and s e r v i c i n g o f th e l e a s e d v e h i c l e :
.1
[We a r e r e s p o n s i b l e f o r t h e f o l l o w i n g m a in te nance and s e r v i c i n g o f Che l e a s e d v e h i c l e :
1 7.
W a rra n tie a
The l e a s e d v e h i c l e i s s u b j e c t t o th e f o l l o w i n g e x p r e s s w a r r a n t i e s :
-3
18.
E a r l y Te r m i n a t i o n and D e f a u l t
( a ) You may t e r m i n a t e t h i s l e a s e b e f o r e t h e en d o f t h e l e a s e t e r m u n d e r t h e f o l l o w i n g
c o n d i t i o n s : __ _____________
_______
The charge for such early termination la
Tb5 We may t e r m i n a t e t h i s l e a s e b e f o r e t h e e n d o f t h e l e a s e t e r m u n d e r t h e ’ f o l l o w i n g
c o n d itio n s:
Upon s u c h t e r m i n a t i o n we s h e l l b e e n t i t l e d t o t h e f o l l o w i n g c h a r g e ( s ) f o r
Tc"5 To t h e e x t e n t t h e s e c h a r g e s t a k e i n t o a c c o u n t t h e v a l u e o f The v e h i c l e a t t h e end
o f t h e l e a s e t e r m , you h a v e t h e same r i g h t t o a p r o f e s s i o n a l a p p r a i s a l a s t h a t a t a t e d i n
Ite m 1 4 ( b ) .
19. S e c u r i ty I n t e r e s t
We r e s e r v e a s e c u r i t y i n t e r e s t o f t h e f o l l o w i n g t y p e i n t h e p r o p e r t y l i s t e d b e l o w t o
s e c u r e p e r f o r m a n c e o f y o u r o b l i g a t i o n s u n d e r t h i s l e a s e : _______
20.
L a te P ay ments
The c h a r g e f o r l a t e pay m en ts i s
21.
O ption to Purchase
(You ha v e an o p t i o n t o p u r c h a s e t h e l e a s e d v e h i c l e _ 4 t t h e f o l l o w i n g t i n e s :
.
I f a t t h e end o f t h e t e r m ; t h e p r i c e w i l l be $
I f p r i o r t o t h e end o f t h e t e r m , t h e p r i c e w i l l b e
.
$
•I
[You h a v e n o o p t i o n t o p u r c h a s e t h e l e a s e d v e h i c l e . )
IN S T R U C T IO N S
I t e m 1. The disclosures must be made on
a written dated statement. All lessors and
lessees must be Identified by n a me (5 226.15
(a)). I , for example, one person arranges
f
the lease and another person enters Into the
lease, both must be Identified as lessors
(§ 226.2(h) and (oo)). A n address m a y Aug
ment the Identification but need not be sup
plied as part of the disclosure form.
It e m 2. This disclosure provides a brief de
scription of the leased prpperty (5 226.15(b)
(1)). Lessors m a y Include a more detailed
description including, for example, special
accessories. There Is no requirement that a
vehicle Identification number for the ve
hicle be disclosed.
I t e m 3. This disclosure shows the total
amount of any Initial payment the customer
must make wh e n the lease is entered Into
(5 226.15(b)(2)). The components of the
Initial payment must he Identified and may,
at the lessor’ option, be Itemized with re
s
spect to dollar amount.
This Item Is divided into two distinct parts.
The items identified in 3(a) are those which
are Included In the calculation of the “Total
Lease Obligation.” Those which appear In
3(b) are not Included In the “Total Lease
Obligation.” For convenient reference and to
provide the customer with the total amount
due at the Inception of the lease, subtotals
for 3(a) and 3(b) are provided as well as a
combined total of 3(a) and 3(b) (shown as
"Total Payment D u e at Inception”)
.
The term "Capitalized Cost Reduction” i
s
used to Indicate a payment In the nature of
a downpayment which reduces the value o f
the leased vehicle to be amortized over the
term of the lease.
The "Advance Monthly Payment” Is the
total of all amounts collected at the Incep
tion of the lease which are to be attributed
to a monthly payment(s). For example, i
f
the first mo n t h ’ rental payment I collected
s
s
at the inception, .the form might read "Ad
vance Monthly Payment of the first month's
rent” or a similar phrase. If the last m o n t h ’
s
payment, or any other payment In the na
ture of rental for a portion of the term. Is
collected at the Inception, appropriate lan
guage should be provided to describe the
oompanento ol the "Advanae Monthly Pay
ment."
Checklists are provided for bath 3(a) and
3(6) to eld In identifying their components.
Blank spaces end cheek boxes are provided
to Identity any other elements which are to
be Included In .these Items.
It e m 4. This Item discloses the payment
the lessee m ust m a k e each payment period.
This Item Is divided Into two parts. The
terms In 4 (a) are those portions of each pay
ment which are Included In the computation
of the "Total Lease Obligation.” This Item
Includes sales/use taxes paid on the periodic
(monthly) payment. The terms In 4(b) are
not Included In the "Total Lease Obligation.”
For convenient reference and to provide the
customer with the total amount of each pay
ment, subtotals are provided for 4(a) and
4(b) as well as (he combined total of 4(a)
and 4(b) (shown as the "Total Monthly Pay
m ent”). The components of 4(a) and 4(b)
m a y be Itemized as to dollar amount.
I t e m 5. This Item discloses the term of the
lease, the date of the first periodic payment
and the dates or periods D f all subsequent
periodic payments. The blank spaces should
be filled In with the appropriate terms. For
example, after the phrase "Term of this
lease:” The lessor m a y place the words "24
months” of "April 2, 1977, through April 2
,
1979,” as appropriate. In the blank spaces
provided after the phrase ”Tbe first monthly
payment of:” should be the appropriate
amount and date. The first monthly payment
m a y be part or all of the “Advance Monthly
Payment” disclosed under 3(h). The phrase
“subsequent payments of” should be pre
ceded by the appropriate number of pay
ments and followed with the appropriate
terms, such as “9100.00 on the 2d of each
m on th thereafter.”
I t e m 6. This Item discloses the total of the
basic monthly payments payable over the
term of the lease. This figure Is computed by
multiplying the basic monthly payment from
Item 4(a) by the number of subsequent pay
ments In Item G and adding to the product
the basic portion of the first monthly pay
ment. This figure will be used In computing
the "Total Lease Obligation.”
I t e m 7. This item discloses the total of
other charges payable to the lessor (5 226.16
(b)(5)). This excludes charges for official
fees, taxes, Insurance and charges disclosed
as totals under other Items. The individual
components must be Identified and Itemized
as to amount. A blank check box Is provided
in order to add to the l s , as necessary.
it
I t e m 8. This Item discloses the total
amount to be paid by the lessee during the
lease term for taxes and other official fees
(1226.15(b)(4)).
I t e m 9. This Item requires disclosure of the
types and amounts of Insurance coverage,
with their total premium cost, If the Insur
ance Is provided by the lessor (J 226.15
(b) (6) (1)). In the alternative, only the types
and amounts of coverage required of the
lessee must be disclosed If the lessee provides
the Insurance coverage (f 226.15(b) (6) (11)).
The disclosure Is to be completed by identi
fying the types and amounts of Insurance
coverage following the colon at the end of
the first sentence. If the lessor Is to provide
the coverage the top check box should be
filled in and the total premium cost In
dicated In the blank space provided. Other
wise the bottom check box should be filled
In.
I t e m 10. This Item provides for disclosure
of the estimated value of the leased vehicle
at the end of the term, an element of the
'"Total Lease Obligation" (4126.15 (b) (19)
(1)4. Th e reference to Item M 4a to can The
leasee's attention to the qualifying disclo
sures in that Item required by 11228.15
(to) (14) and 226.15(b) (15) ( 1 and (il . A
1)
l)
blank space Is provided In which to indicate
whether the value shown I , for example,
s
"retail’ or "wholesale” value.
’
Ite m s 11, 12 an d 13. These Items provide
for disclosure of the difference between the
“Total Lease Obligation” and the vehicle's
value at the inception of the lease. Hie defi
nition of “Total Lease Obligation” (i 220.2
(rr)) Is the s u m of an; initial charges (item
3(a)) the total of basic m onthly payments
,
(Item 6) and the estimated value of the
property at the end of the term (Item 10).
The Board has Indicated tt does not consider
items such as refundable security deposits
and insurance premiums to be amounts
properly Includable In the “Total Lease Obli
gation.” 41 F R 46537.
I t e m 14. This Item provldee disclosures
with respect to the lessee’ liability at the
s
end a t the lease term. The bracketed phrase
In the second sentence Is appropriate only
where the lessee will be given any surplus re
sulting H a m the disposition. Item 14(a) I m
plements, in lay language, the disclosures
required by 1226.16(b) (15) (U) and ( 1 )
11.
The lessor may. In Item 14(a) 1 reference the
,
standards set forth In Item 16, If the lemor
set such standards. If the lessor does not set
standards for wear and use, the second
bracketed phrase should be used. Item 14(b)
discloses the lessee’ right to an Independent
s
appraisal required by I 226.16(b) (14). The
blank space in Item 14(b) Is provided to In
dicate whether the value of the appraisal
should be. for example, “wholesale” or “re
tail.” This item should be consistent with
the type of value used In Item 10.
I t e m 15. This Item discloses reasonable
standards for wear and use established by the
lessor. The lessor Is permitted but not re
quired to set such standards. Therefore, the
disclosure m a y be omitted by lessors who do
not set standards for wear and use (5 226.16
(b) (8)).
I t e m 16. This Item provides for disclosure
of the maintenance and servicing responsi
bilities (1226.15(b)(8)). These responsibil
ities m a y be allocated either to the lessor or
to the lessee, or m a y be divided between
them.
I t e m 17. This Item discloses all express
warranties on the leased property m ad e by
the manufacturer or lessor and available to
the lessee (i 226.15(b) (7)). A brief identifi
cation of the warranty must be supplied. A
reference to the standard TmtTnifmUnmry
warranty, for example, would suffioe.
I t e m 18. This item discloses the conditions
under Whldh the lessee m a y terminate the
lease prior to the end of the leaee term. It
also discloses the amount or method of de
termining the amount of the charge which
the lessee must pay tor early termination
(i 226.15(b) (12)). This Item should disclose
the conditions under which the lessor m a y
terminate the lease prior to the end of the
term, such as default. This Item should alee
be used to disclose the amount or method
of determining the amount of any default
charges (I 226.16(b) (10)). The charges or
method of determining the charges for early
termination by the lessor other than for
leasee's default should be separately specified
In this Item.
I t e m 19. This disclosure of the security
taken must Include, In the space provided.
a brief Identification of the types of security
Interests and an identification of the prop
erty covered by each ( 226.15(b) (9)).
§
It e m 20. , This disclosure Indicates the
amount or method of determining the
amount of any charges for late payment
( 226.15(b) (10)).
§
It e m 21. This item provides alternative dis
closures covering the several options a lessor
m a y offer to a lessee to purchase the leased
property. A lessor should use the disclosures
§ 2 2 6 .1 5 0 2
applicable to the lease plan used. For ex
ample, I no option to purchase I offered,
f
s
only the last sentence of the item should be
used. If the lessor offers an option to pur
chase, the times at which It may be exer
cised must be supplied. The price must be
disclosed for an option exercised at the end
of the term and the price or method of
computing the price for an option exercised
during the lease term must be supplied
(§ 226.15(b) (11)).
Closed-end or n et vehicle lease disclosure statem ent.
D a te __________
T h e se d i s c l o s u r e s a r e p r o v i d e d p u r s u a n t t o t h e F e d e r a l Consumer L e a s i n g A c t.
1.
LESSOR(S)
LESSEE(S)
2-
D e s c rip tio n o f lc aaed p ro p e rty
Year
Make
Model
Body, S t y l e
V eh icle A T T "
To t a l P a y m e n t ^ u e a t i n c e p t i o n : ___
/ / C a p i t a l i z e d Co s t R e d u c tio n / 7 D e l i v e r y C h ar g e
7T r a d e - i n A ll ow anc e
7_? R a g i s t r a t i o n F e e s
/ /A d v an c e M o n th ly Payment o f
I /R efundable S e c u r ity D eposit / /
"**
3.
/
^7
Term o f t h i s l e a s e :
~
The f i r s t m o n t h l y o f payment o f $
s u b s e q u e n t paym en ts o f $
month t h e r e a f t e r .
TI
o f each
T o t a l M o n th ly Payment:
6-
i s d u e on >
"on th e
T o t a l o f M o n th ly P a y m e n ts :
7.
/
—
To t a l o f O t h e r C h arge s P a y a b l e t o L e s s o r :
7Disposition
$
m ---
/
7taaintenance 9
- _
_
$____;
TT
F ees end Taxes
T o t a l amount you w i l l pay d u r i n g t h e t e r m f o r o f f i c i a l f e e s ,
r e g i s t r a t i o n , c e r t i f i c a t e o f t i t l e , l i c e n s e f e e e and t a x e s .
9.
Insurance
The f o l l o w i n g t y p e s and am ounts o f i n s u r a n c e w i l l b e a c q u i r e d i n
co n n ection w ith t h i s le a s e :
_______________
j
i
T6-
/We ( l e s s o r ) w i l l p r o v i d e t h e i n s u r a n c e c o v e r a g e q u o t e d ab ov e
f o r a t o t a l premium c o a t o f 9
/You ( l e s s e e ) a g r e e t o p r o v i d e i n s u r a n c e c o v e r a g e i n t h e am ounts and
ty p e s in d i c a t e d above.
S t a n d a r d s f o r Wear and Use
"
The f o l l o w i n g s t a n d a r d s a r e a p p l i c a b l e f o r d e t e r m i n i n g u n r e a s o n a b l e o r e x c e s s i v e w e a r
and u s e o f t h e l e a s e d v e h i c l e : _____________________________________________ __________________________
-2
11.
Maintenance
[You are reepo n elble fo r t t * f o l l o v l n i nalntanance and e er v ic in g o f tha laaaad v e h i c l e :
....
^ ^
.....
i
.
..
...
...."I
[W ara r a ip o n a ib la to r tha fo llo w in g neinten ance and « e r v ic in g o f th e Laaaad v a h ic la i
a
12.
Warrant iaa
Tha laaaad v e h ic le la aubjact to tha f o ll e v ln g axpraaa w arrantiaa:
13.
E a r l y T e n i n a t i o n and D e f a u l t
(a )
eondlt ionaI
You nay ta m in a ta th ia laaaa bafera tha and o f tha laaa a t a n nndar th a f o ll e v ln g
Tha c h a rg e
fo r
auch a a rly
te n in a tio n
ia
■ (h i Ha nay ta m in a ta th ia laa a a bafora tha and o f tha laaaa t a n under tha fo llo w in g
aoh d itlo n a i
Upon auch ta r n ln a tio n wa s h a ll ba e n t i t l e d to tha fo llo w in g c h a r g ela l for
TeJ To tha e x te n t th at thaaa ebargaa taka in to account tha walua o f tha w ahiela o t the
and o f tha laaaa t a n , i f you diaagraa w ith tha walua wa aaaign to tha w a h ie la , you may ob
t a i n a t your own axpanaa, fron an independent th ir d party agraaabla t o both o f n a, o p r o fe a a io n a l appraleal o f th e
value o f tha laaaad w ahiela which could ba r a a lia a d a t a a la .
Tha appraiaad value a h a ll than ha uaad aa tha a c tu a l v a lu e .
14. Security Interact
Ha raaarva a a e cu rlty in ta r e a t o f tha fo llo w in g type in th e property 11atad below t o
aaeura p a r fo n a n c a o f your o b lig a tlo n a under th ia laaaa:
15.
L a te P aym ent!
Tha charia for la t a paTMnta la
*
16*
L e a a a a 'a O ption t o Purchaaa
t?ou hava an o p t i o n t o purchaaa tha laaaad v a h lc la a t th a fo llo w in g t l m a t
I f at tha and o f tha tara» tha p rica w i l l ba 9
I f p rior t o tha and o f tha tarag tha p r ic a w i l l ba
•
9
""TT
[Ton have no op tio n t o purchaaa tha laaaad v e h i c l e . 1
I
n s t r u c t io n s to r
Clo
sed
su r e
S
-E
n d
or
C
N
o m p l e t io n
et
V
e h ic l e
i 228.1502—
ot
L
ease
D
is c l o
ta tem en t
G EN ER A L IN S T R U C T IO N S
Completion of this form m a y be facilitated
by reference to the following instructions.
Any question as to the permissibility or ac
curacy of a specific disclosure m a y be an
swered by reference to Regulation Z, 12 C F R
Part 226. Parenthetical citations are to Reg
ulation Z.
Information which I required to be dis
s
closed m a y be estimated If the Information
la unknown or unavailable, provided that the
information is clearly identified as an esti
mate and the estimate I based on the best
s
Information available and Is reasonable
(5 226.6(f))
.
An y Inapplicable disclosures should be de
leted. This form Is based on a monthly pe
riodic payment. Any lessor whose lease con
templates a different payment period should
change the form where It refers to “m o n thl
y*1
amounts to read "weekly” or other time pe
riod. as appropriate.
All numerical amounts must be stated In
figures and shall be printed In not less than
the equivalent of ten point type or elite type
written numerals or legibly handwritten
($ 226.6(a)) Paragraph numbers need not be
.
printed In ten point type or Its equivalent.
S P E C IF IC
IN S T R U C T IO N S
I t e m 1. The disclosures must be made on a
written dated statement. All lessors and
lessees must be identified by n a m e ($226.15
(a)) I , for example, one person arranges the
. f
lease and another person enters Into the
lease, both must be Identified as lessors
($226.2 (h) and (oo)). A n address m a y aug
ment the identification but need not be sup
plied as part of the disclosure form.
I t e m 2. This disclosure provides a brief de
scription of the leased property ($ 226.15
(b) (1)). Lessors m a y Include a more detailed
description Including, for example, special
accessories. There I no requirement that a
s
vehicle identification number for the vehicle
be disclosed.
It e m 3. This disclosure shows the total
amount of any Initial payment the customer
must make when the lease i entered Into
s
($ 226.15(b) (2)) The components of the
.
Initial payment must be Identified and may.
at the lessor’ option, be itemized with re
s
spect to dollar amount.
The term "Capitalized Cost Reduction" i
s
used to Indicate a payment in the nature of
a downpayment which reduces the value of
the leased vehicle to be amortized over the
term of the lease.
The “Advance Monthly Payment” is the
total of all amounts collected at the incep
tion of the lease which are to be attributed
to a monthly payment(s). For example, i
f
the first m o n t h ’ rental payment I collected
s
s
at the inception, the form might read “A d
vance Monthly Payment of the first mo nt h’
s
rent” or a similar phrase. If the last month's
payment, or any other payment in the nature
of rental for a portion of the term, I col
s
lected at the Inception, appropriate language
should be provided to describe the compo
nents of the “Advance Monthly Payment."
Checklists are provided to aid In Identify
ing the components. Blank spaces and check
boxes are provided to Identify any other
elements which are to be Included in this
item.
i t e m 4. This Item discloses the term of the
lease, the date of. the first periodic payment
and the dates or periods of all subsequent
periodic payments. The blank spaces should
be filled In with the appropriate terms. For
example, after the phrase "Term of this
lease:" the lessor m a y place the words “24
months" or “April 2. 1977, through April 2,
1979,” as appropriate. In the blank spaces
provided after the phrase “The first monthly
payment of:” should be the appropriate
amount and date. The first monthly payment
m a y be part or all of the "Advance Monthly
Payment" disclosed under Item 3. The phrase
"subsequent payments of” should be pre
ceded by the appropriate number of pay
ments and followed with the appropriate
terms, such as “$100.00 on the 2d of each
month thereafter."
It e m 5. This Item discloses the payment the
lessee must ma k e each payment period
($ 226.15(b) (3.)). The component parts of the
"Total Monthly Payment" m a y hut need not
be Identified and Itemized as to amount.
It e m S. This Item dls&toses the total of the
monthly payments payable over the term of
the lease ($ 226.15(b) (3)). This figure is
computed by multiplying the monthly pay
ment from Item 5 by the number of subse
quent payments in Item 4 and adding the
first monthly payment to the product.
It e m 7. This Item discloses the total of
other charges payable to the lessor ($ 226.15
(b)(5)). This excludes charges for official
fees, taxes. Insurance and charges disclosed
as totals under other items. The Individual
components must be identified and itemized
as to amount. A blank check box i provided
s
In order to add to the l s , as necessary.
it
It e m 8. This Item discloses the total
amount to be paid by the lessee during the
lease term for taxes and other official fees
($ 226.15(b) (4)).
I t e m 9. This item requires disclosure of the
types and amounts of Insurance coverage,
with their total premium cost, If the Insur
ance I provided by the lessor ($ 226.15(b)
s
(6) (1)). In the alternative, only the types
and amounts of coverage required of the les
see must be disclosed I the lessee provides
f
the Insurance coverage ($ 226.15(b) (6) (U)).
The disclosure Is to be completed by Iden
tifying the types and amounts of Insurance
coverage following the colon at the end of
the first sentence. If the lessor Is to provide
the coverage the top check box should be
filled In and the total premium cost Indicated
In the blank space provided. Otherwise the
bottom check box should be filled In.
I t e m 10. This Item discloses reasonable
standards for wear and use established by the
lessor. The lessor Is permitted but not re
quired to set such standards ($ 226.15(b)
(8)). Therefore, the disclosure m a y be
omitted by lessors.who do not set standards
for wear and use.
Ite m 11. This Item provides for disclosure
of the maintenance and servicing responsibil
ities of the parties (S 226.15(b) (8)). These
responsibilities m a y be allocated either to the
lessor or to the lessee, or m a y be divided be
tween them.
I t e m 12. This item discloses all express
warranties on the leased property made by
the manufacturer or lessor and available to
the lessee (S 226.15(b) (7)). A brief identifi
cation of the warranty must be supplied. A
reference to the standard manufacturer’
s
warranty, for example, would suffice.
I t e m 13. This Item discloses the conditions
under which the lessee m a y terminate the
lease prior to the end of the lease term. It
also discloses the amount or method of deter
mining the amount of the charge which the
lessee must pay for early termination ($ 226 15(b) (12)). This item should disclose the
conditions under which the lessor may termi
nate the lease prior to the end of the term,
such as default. This Item should also be
used to disclose the amount or method of
determining the amount of any default
charges ($ 226.15(b) (10)). The charges or
method of determining the charges for early
termination by the lessor other than for les
see’ default should be separately specified in
s
this Item. The blank space In 13(c) Is pro
vided to Indicate whether the appraisal
should be, for example, "retail” or "whole
sale."
I t e m 14. This disclosure of the security
taken must Include, in the space provided,
a brief Identification of the types of security
Interests and an identification of the prop
erty covered by each (i 226.15(b) (9)).
Item 15. T h i s d i s c l o s u r e i n d i c a t e s t h e
am ount
or m e th o d
of d eterm in in g
th e
a m o u n t o f a n y c h a rg es for la te p a y m e n t
(§ 2 2 6 .15(b) (1 0 )).
Ite m 16. T h i s i t e m p r o v i d e s a l t e r n a t i v e d i s
c lo su re s c o v e rin g t h e se v e ra l o p ti o n s a lessor
m a y offer to a le ssee to p u r c h a s e t h e leased
p r o p e r t y . A le sso r s h o u l d u s e t h e d is c lo su re s
a p p lic a b le t o t h e lease p l a n u se d . F o r e x a m
§ 2 2 6.1 503
p l e if n o o p t i o n t o p u r c h a s e Is o f f e r e d , o n l y
th e la st s e n te n c e of th e ite m sh o u ld be used.
If t h e lessor offers a n o p ti o n to p u rc h a se ,
th e tim e s a t w h ic h it m a y be exe rcised m u s t
b e s u p p lie d . T h e price m u s t be disclo sed for
a n o p tio n exercised a t t h e e n d o f th e te rm
a n d th e p rice o r m e th o d of c o m p u tin g th e
p ric e for a n o p t i o n ex e rcised d u r in g th e lease
t e r m m u s t b e s u p p l i e d (§ 2 2 0 . 1 5 ( b ) ( 1 1 ) ) .
F u r n i t u r e lease d isc lo s u re s t a te m e n t .
Date
Th e se d i s c l o s u r e s a r e p r o v i d e d p u r s u a n t t d t h e F e d e r a l Consumer L e a s i n g A c t.
1.
LESSOR(S)
2.
D e s c r ip tio n o f le ased p ro p erty ( i s a t t a c h e d ] .
I te m
Color
/
/
4.
LESSEE(S)
S to c k
I
/R e fu n d ab le S e c u rity D eposit
/A d v a n c e M on th ly Payment o f
Term o f t h i s l e a s e d
The f i r s t m o n t h l y payment o f S _
s u b s e q u e n t paym ents o f S
oi e a c h month t h e r e a f t e r .
Mfg.
f
Q ty.
/ D e l i v e r y Char g e
tr
r “7
i s due on
on t h e
5.
T o t a l M o n th ly Paym en t:
6.
T o t a l o f M o nt hl y P a y m e nt s ;
7.
T o ta l o f O ther Charges Payable to L e ss o r :
/ ' / ' P i c k - u p c h a r g e $ __________
/ 7_____
8.
Fee s an d Taxes
“ T o t a l amount you w i l l pay d u r i n g t h e te r m f o r o f f i c i a l
and t a x e s .
fees
Insurance
V o i " ( l e s s e e ) agree to p rovide in su ran ce coverage o f th e fo llo w in g types
1__ 7 i n t h e f o l l o w i n g am oun ts:
■
We ( l e s s o r ) w i l l p r o v i d e t h e " f o l l o w i n g t y p e s and am ou nts o f i n s u r a n c e
/_ 7 co v erag e:
T o t a l premium c o a t :
$
-2
J
/
TO.
You a g r e e t o p a y a w a i v e r
ance.
T o t a l Waiver Fe e :
Maintenance
[You a r e r e s p o n s Lbl e
[We a r e
11.
for
$
Pe r m o n t h
in l i e u o f
inaur$
the
the
follow ing maintenance of the
follow ing maintenance of th e
leased
leased
property:
property:
W arranties
The
12.
responsible
for
f ee o f
leased
property
is
subject to
the
following express w arranties:
S t a n d a r d s f o r Wear and Use
The f o l l o w i n g s t a n d a r d s a r e a p p l i c a b l e f o r d e t e r m i n i n g u n r e a s o n a b l e o r e x c e s s i v e w e a r
a n d u s e o f t h e l e a s e d p r o p e r t y : ..................................................
............. ...
1 3.
E a r l y T e r m i n a t i o n a nd D e f a u l t
(a)
Yo»7 may t e r m i n a t e t h i s l e a s e
cond i t i o n s :
The c h a r g e
f o r such e a r l y t e r m i n a t i o n
(b)
We may t e r m i n a t e t h i s
conditions:
lease
t h e end o f t h e l e a s e
......................
...................
term under th e
b e f o r e t h e end o f t h e
lease
the
term under
be e n t i t l e d
to the
following
______________
following charge (s):
Security Interest
We r e s e r v e a s e c u r i t y i n t e r e s t o f t h e f o l l o w i n g t y p e i n t h e p r o p e r t y l i s t e d
secure performance of your o b l i g a t i o n s under t h i s le a s e :
Late Payments
Th e c h a r g e f o r
late
payments
following
is
•
Upon s u c h t e r m i n a t i o n we s h a l l
14.
before
balow to
is
•
Option to Purchase
T you h a v e a n o p t i o n t o p u r c h a s e a n y o r a l l i t e m s o f t h e
tim es:
I f a t t h e end o f t h e t er ra , t h e p r i c e w i l l be $
i f prior
to
t h e e nd o f t h e ,
term the
leased p roperty a t
the
following
p r i c e wil I be f
• i
[ You h a v e n o o p t i o n
I
n s t r u c t io n s fo r
F
u r n it u r e
L
C
ease
to
purchase
o m p l e t io n
D
o f
is c l o s u r e
S
the
leased
§ 226.1503—
ta tem en t
G EN ERA L IN S T R U C T IO N S
Completion of this form may be facilitated
by Reference to the following instructions.
Any question as to the permissibility or ac
curacy of a specific disclosure m a y be an
swered f>y reference to Regulation Z, 12 C F R
Part 226. Parenthetical citations are to Reg
ulation Z.
property.}
Information which i required to be dis
s
closed m a y be estimated i the information
f
is unknown or unavailable: Provided , That
the information is clearly Identified as an
estimate and the estimate Is based on the
best information available and i reasonable
s
(§ 226.6(f)).
Any inapplicable disclosures should be
deleted. This form is based on a monthly
periodic payment. Any lessor whose lease
contemplates a different payment period
K
should change the form where It refers to
“monthly” amounts to read "weekly” or other
time period, as appropriate.
All numerical amounts must be stated In
figures and shall be printed In not less than
the equivalent of ten point type or elite
typewritten numerals or legibly handwritten
(§ 226.6(a)) Paragraph numbers need not be
.
printed In ten point type or Its equivalent.
S P E C IF IC
IN S T R U C T IO N S
I t e m 1. The disclosures must be made on
a written dated statement. All lessors and
lessees must be Identified by name (§ 22615(a)). I , for example, one person arranges
f
the lease and another person enters into the
lease, both must be Identified as lessors
(§ 226.2 (h) and (oo)) A n address m a y aug
.
ment the Identification but need not be
supplied as part of the disclosure form.
It e m 2. This disclosure provides a brief
description of the leased Items (5 226.15(b)
(1)). In the left column the n ame of the
item should appear. Hie relevant entry
should be made In the appropriate box in the
columns to the right of the names of the
items as indicated by the column headings.
All of the descriptive elements In the column
neadings. except the one labeled “Item,” are
examples only. Those which are Inapplicable
to a lease plan m a y be deleted. Other descrip
tive column headings m a y be added (as in
dicated by the blank columns) If the lessor
desires.
It e m 3. This disclosure shows the total
amount of any initial payment the customer
must m ake when the lease i consummated
s
(9 226.15(b)(2)). The components of the
Initial payment must be identified and may,
at the lessor’ option, be Itemized with re
s
spect to dollar amount. Additional compo
nents m a y be added to the l s , as necessary,
it
by use of the blank check box.
The “Advance Monthly Payment” i the
s
total of all amounts collected at the inception
of the lease which are to be attributed to a
monthly payment(s). For example, I -the
f
fi
rst m o n t h ’ rental payment Is collected at
s
the inception, the form might read “Ad
vance Monthly Payment of the first m on t h’
s
rent” or a similar phrase. If the last mo nt h’
s
payment^or any other payment in the nature
of rental for a portion of the term, is col
lected at the inception, appropriate language
should be provided to describe the compo
nents of the “Advance Monthly -Payment.”
It e m 4. This item discloses the term of the
lease, the date of the first periodic payment
and the dates or periods of all subsequent
periodic payments. The blank spaces should
be filled In with the appropriate terms. For
example, after the phrase "Term of this
lease:” the lessor m a y place the words “24
months" or “April 2 1977, through April 2
,
,
1979,” as appropriate. In the blank spaces
provided after the phrase “The first monthly
payment of:” Should be the appropriate
amount and date. The first monthly payment
m a y be part or all of the "Advance Monthly
Payment" disclosed under Item 3 The phrase
.
"subsequent payments of” should be preceded
by the appropriate number of payments and
followed with the appropriate terms, such as
“$100.00 on the 2d of each month thereafter."
I t e m 5. This item discloses the payment
the lessee must make each month ($226.15
(b)(3)). The component parts of the
monthly payment m a y but need not be
Itemized as to amount.
I t e m 6. This item discloses the total of
the monthly payments payable over the term
of the lease. This figure Is computed by
multiplying the amount of the monthly pay
ment In Item 5 by the number of subsequent
payments In Item 4 and adding to that prod
uct the amount of the first monthly pay
ment.
I t e m 7. This item discloses the total of
other charges payable to the lessor (S 226.15
(b)(5)). This excludes charges for offi al
ci
fees, taxes. Insurance and charges disclosed
as totals under other items. The Individual
components must be Identified and Itemized
as to amount. A blank check box is provided
In order to add to the l s , as necessary.
it
I t e m 8. This item discloses the total
amount to be paid by the lessee during the
lease term for taxes and other official fees
($ 226.15(b) (4)).
.I t e m 9. This Item provides alternative
methods Of disclosing Insurance coverage. It
provides a disclosure for situations In which
the lessee provides the coverage, In which
case the types and amounts of coverage must
be specified (§ 226.15(b) (6) (ii)). It provides
a disclosure for situations. In which the
lessee procures coverage through the lessor,
in which case the types, amounts and costs
of coverage must be specified (S 226.15(b)
(6)(i)). It also provides for disclosure of a
fee In lieu of Insurance.
I t e m 10. This Item provides for disclosure
of the maintenance and servicing responsi
bilities of the parties ($ 226.15(b) (8)).
These responsibilities m a y be allocated either
to the lessor or to the lessee, or m a y be
divided between them.
I t e m 11. This Item discloses all express
warranties applicable to the leased property
m ade by the manufacturer or lessor and
available to the lessee ($ 226.15(b) (7)).: A
brief identification of the warranty must be
supplied. A reference to the standard m a n u
facturer's warranty would suffice.
I t e m 12. This Item discloses standards for
wear and use established by the lessor. The
lessor is permitted, but not required, to set
such standards (§ 226.15(b) (8)).
I t e m 13. This Item discloses the conditions
under which the lepsee m a y terminate the
lease prior to the end of the lease term. It
also discloses the amount or method of de
termining the amoifht of the charge which
the lessee must pay for early termination
($ 226.15(b) (12) j. This item should disclose
the conditions under which the lessor may
terminate the lease prior to the end of the
term, such as default. This item should also
be used to disclose the amount or method of
determining the amount of any default
charges ($ 226.15(b) (10)). The charges or
method of determining the charges for early
termination by the lessor other than for
lessee’ default should be separately specified
s
in this item. The blank space in 13(c) Is pro
vided to indicate whether the appraisal
should be, for example, “retail” or "whole
sale."
I t e m 14. This disclosure of the security
taken must include. In the space provided,
a brief identification of the types of security
interests and an identification of the prop
erty covered by each such Interest ($ 226.15
(b)(9)).
I t e m 15. This disclosure Indicates the
amount or method of determining the
amount of any charges for late payment
(§ 226.15(b) (10) )
.
I t e m 16. This Item provides alternative dis
closures covering the several options a lessor
m a y offer to a lessee to purchase the leased
property. A lessor should use the disclosures
applicable to the lease plan used. For ex
ample, if no option to purchase Js offered,
only the last sentence of the Item should be
used. If the lessor offers an option' to pur
chase, the times at which It m a y be exercised
must be supplied. The price must be dis
closed for an option exercised at the end of
the term and the price or method of comput
ing the price for an option exercised during
the lease term must be supplied ($ 226.15(b)
(ID).
(Interpret and apply 12 C F R Part 226.15.)
By order of the Board of Governors of
the Federal Reserve System, February
17. 1977.
T h e o d o r e E. A l l i s o n ,
Secretary of the Board.
|FR Doc.77-5733 Filed 2-24-77:8:45 am|
