W. Va. Code R. § 106-16-2

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 106-16-2 - Definitions

2.1. "Bank", as used in this regulation, means a corporation heretofore or hereafter chartered to conduct a banking business under the laws of West Virginia and embraces and includes a trust company or an institution combining banking and trust company facilities, functions and services chartered or authorized to conduct such business in this state and includes industrial banks as authorized by W. Va. Code '31-7-1 et seq.

2.2.

(a) "Net Lease", as used in this regulation, means a lease which is the functional equivalent to a loan of money secured by the leased properties and under which a bank will not directly or indirectly, provide or be obligated to provide for:

(1) The servicing, maintenance or repair of the lease property during the lease term.

(2) The purchasing of parts and accessories for the leased property; however, the bank may lease improvements and additions to the leased property to the lessee upon its request in accordance with any applicable requirements for maximum estimated rental value.

(3) The loan of replacement or substitute property while the leased property is being serviced.

(4) The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance.

(5) The renewal of any license or registration for the leased property unless such action by the bank is necessary to protect its interest as owner or financier of the leased property.

(b) The limitations contained in subsection 2.2.(a) of this section do not prohibit a bank from arranging for any of the services enumerated in that subsection to be provided to the lessee by a third party (at the expense of the lessee) with respect to property leased by the lessee.

(c) If, in good faith, a bank believes that there has been an unexpected change in conditions which threatens its financial position by significantly increasing it's exposure to loss, the limitations contained in subsection 2.2.(a) of this section shall not prevent the bank as owner and lessor under a net lease, from taking reasonable and appropriate action to salvage or protect the value of the leased property or its interests arising under the lease.

2.3. "Personal property", as used in the regulation, means tangible, personal property including, vehicles, machinery, equipment, furniture and fixtures.

W. Va. Code R. § 106-16-2